Implementing Capital Import Neutrality Means That

question 28

Multiple Choice

Implementing capital import neutrality means that

• A)a sovereign government follows the taxation policies of foreign tax authorities on the foreign-source income of its resident MNCs.
• B)the tax burden a host country imposes on the foreign subsidiary of a MNC should be the same regardless of the country in which the MNC is incorporated.
• C)the tax burden a host country imposes on the foreign subsidiary of a MNC should be the same as that placed on domestic firms.
• D)all of the above

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Definitions:

Economic Profit

The difference between a firm's total revenue and its opportunity costs.

Investment

Investment involves allocating resources, usually money, with the expectation of generating an income or profit, including purchases of bonds, stocks, or real estate.

Interest Rate

The percentage at which interest is charged or paid by a lender to a borrower for the use of money.

Highly Educated

Refers to individuals who have received a high level of education, usually at least a university degree.