Which of the Following Is One of the Gains Derived

question 27

Multiple Choice

Which of the following is one of the gains derived by adjusting transfer prices?

• A) The firm can reduce its tax liabilities by using transfer prices to shift earnings from a low-tax country to a high-tax one.
• B) The firm can use transfer prices to move funds out of a country where a significant currency appreciation is expected.
• C) The firm can use transfer prices to move funds from a parent company to the subsidiary (or a tax haven) when financial transfers in the form of dividends are restricted or blocked by host-country government policies.
• D) The firm can use transfer prices to reduce the import duties it must pay when an ad valorem tariff is in force-a tariff assessed as a percentage of value.

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Definitions:

Acronym

An abbreviation formed from the initial letters of other words and pronounced as a word.

Biofeedback

A technique that teaches individuals to control physiological processes such as heart rate or muscle tension through feedback from these processes.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobe, important in decision making, control of social behaviors, and expression of personality.

Amygdala

A part of the brain located within the temporal lobes, playing a key role in the processing of emotions such as fear, anger, and pleasure.