Firms Cannot Use Transfer Prices to Move Funds from a Subsidiary

question 108

True/False

Firms cannot use transfer prices to move funds from a subsidiary to the parent company when financial transfers in the form of dividends are blocked by host-country government policies.

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Definitions:

Motivation

The psychological forces that compel an individual to take action towards a desired objective, emphasizing the reasons for specific behaviors.

Behavior

The actions, conduct, or functions of a person or animal in response to external and internal stimuli.

Needs Hierarchy Model

A psychological theory proposed by Abraham Maslow that suggests human needs are arranged in a hierarchy from most to least pressing: physiological needs, safety, love/belonging, esteem, and self-actualization.

Manager

A person in charge of managing an organization or a team of employees.