The Organizational Form of a MNC Can Affect the Timing

question 79

Multiple Choice

The organizational form of a MNC can affect the timing of a tax liability. This means

• A)the principle of tax equity might be violated.
• B)as long as regardless of the country in which an affiliate of a MNC earns taxable income, the same tax rates apply, then the tax due date doesn't matter.
• C)tax timing will even out over a reporting cycle, so there is no big deal here.
• D)none of the above

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Definitions:

Real Exchange Rate

The rate at which two currencies can be exchanged, adjusted for inflation, indicating how much of a country's goods and services can be exchanged for those of another country.

Prices Rise

An increase in the cost of goods and services in an economy over a period of time.

Purchasing-Power Parity

A theory that states prices of goods and services should equalize across countries when expressed in a common currency, accounting for exchange rates.

Money Supply

The grand total of money available in an economy at a specific time, encompassing cash, coins, and deposits in checking and savings accounts.