Which of the Following Is Conducive to Low Transfer Prices

question 70

Multiple Choice

Which of the following is conducive to low transfer prices from the parent company to a foreign subsidiary and high transfer prices to the parent company from a foreign subsidiary?

• A) political instability
• B) restrictions on profit or dividend remittances
• C) restrictions in the subsidiary country on the value of imported products
• D) desire to mask the profitability of the foreign subsidiary to keep competitors out

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Definitions:

C

In economic formulas, "C" typically represents consumption spending by households.

Consumers

Individuals or households that purchase goods and services for personal use.

Services

Intangible products such as healthcare, education, and financial advising that are consumed at the point of delivery and do not result in ownership of physical goods.

Supply

The total amount of a specific good or service that is available to consumers, often influenced by price levels.