Suppose a U

question 69

Multiple Choice

Suppose a U.S.-based MNC makes bicycles with parts from its subsidiary in a low-tax East Asian country.The bicycle frames are made here,the component parts (cranksets,wheels,and so on) are made abroad,and the bicycles are assembled in Japan and reimported to the U.S.It can reduce its reported U.S.income-and increase its subsidiary's profits-by

• A)overcharging its subsidiaries for the U.S.-made frames.
• B)undercharging its subsidiaries for the U.S.-made frames.
• C)assembling the bicycles in the U.S.
• D)none of the options

---

Definitions:

Social Factors

Social factors are elements within society such as family, education, income, and religion that influence individuals' behaviors and attitudes.

Alcohol Abuse

The excessive or inappropriate consumption of alcohol leading to negative effects on an individual's health, social life, and responsibilities.

Social-psychological Theory

A framework that explores how individual behavior is influenced by social interaction and the presence of other people.

Prohibition

The legal act of forbidding something, especially the manufacture, transportation, and sale of alcoholic beverages in historical contexts.