Why Would an MNC Receive Only a Partial Remittance of Its

question 48

Multiple Choice

Why would an MNC receive only a partial remittance of its wholly-owned foreign subsidiary's after-tax earnings?

• A)The foreign subsidiary might remit part of its earnings to owners other than the MNC.
• B)The foreign subsidiary might pay some of its earnings in salaries to the officers of the foreign subsidiary.
• C)The foreign subsidiary might have to pay certain fees to the government of the country where it operates.
• D)The foreign subsidiary might retain part of its earnings for reinvestment in the foreign subsidiary.

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Definitions:

Low-Skilled Labor

Jobs or workers that require minimal specialized skills, training, or education, often characterized by low wages.

Foreign Direct Investment

Investment by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.

U.S. Labor

Refers to the workforce and labor movement within the United States, including its history, policies, and debates concerning workers' rights.

Downward Pressure

Forces or factors that lead to a decrease in prices, wages, or other economic indicators.