Scenario - the Audrey Firm

question 60

Multiple Choice

Scenario - The Audrey Firm
The Audrey Firm is an international trade consulting firm currently providing its services in eight foreign nations.The primary goal of this company is to prevent trade missteps from taking place between foreign nations conducting business with each other.The participating nations prefer to seek counsel with this firm before any of their actions result in major international involvement or World Trade Organization intervention.
In the past,the Audrey Firm's team of experts has handled international situations having the potential to create serious unrest between neighboring countries.Their guidance and expertise have been successful in keeping trade operating freely in several areas of the globe.The Audrey Firm is receiving an award for their exemplary service later this year in Washington D.C.
-Which one of the following would be the least restrictive way in which India and China could impede sales of Power Trip's products within their borders despite the agreement to allow free operations of the company within their nations' boundaries?

• A) Place a tariff on the products
• B) Establish an ad valorem tariff for the products
• C) Establish a generalized system of preferences (GSP)
• D) Establish a very high specific tariff
• E) Establish stringent custom duties

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Definitions:

Income Taxes

Taxes levied by governments on the income generated by businesses and individuals within their jurisdiction.

Formal Written Statement

A document that articulates official information or positions in a structured and official manner.

Merchandise Purchases

Transactions involving the buying of goods for resale, typically recorded as inventory in a business's accounting records.

Gross Profit

The difference between revenue and the cost of goods sold before deduction of overheads, payroll, taxation, and interest payments.