Price Controls, Financing Restrictions, Export Commitments, Taxes, and Local-Sourcing Requirements

question 56

Multiple Choice

Price controls, financing restrictions, export commitments, taxes, and local-sourcing requirements are examples of:

• A)Ownership-control risks
• B)Operational risks
• C)Transfer risks
• D)Functional risks

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Definitions:

Taxes

Mandatory fiscal contributions or other forms of levies required from taxpayers by governmental bodies to support government expenditures and diverse public costs.

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, placing a higher relative burden on lower-income earners.

Excise Tax

A tax levied on the manufacture, sale, or consumption of certain products or activities, often specific to certain goods like tobacco, alcohol, and fuel.

Deadweight Loss

The loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved.