Global Giant, a Multinational Corporation, Has a Producing Subsidiary in a Low

question 54

Multiple Choice

Global Giant, a multinational corporation, has a producing subsidiary in a low tax rate country and a marketing subsidiary in a high tax country.If Global Giant wants to minimize its worldwide tax liability, we would expect Global Giant to

• A)stop producing in the low tax rate country.
• B)stop marketing in the high tax rate country.
• C)establish a low transfer price when the producing unit sells to the marketing unit.
• D)establish a high transfer price when the producing unit sells to the marketing unit.
• E)be indifferent as to its transfer pricing policy.

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Definitions:

Personality

An individual’s characteristic pattern of thinking, feeling, and acting.

Genes

The biochemical units of heredity that make up the chromosomes; a segment of DNA capable of synthesizing a protein.

Evolutionary Perspective

An approach in psychology that emphasizes the role of natural selection and adaptation in the development of behavior and mental processes.

Cognitive Perspective

A psychological approach that focuses on how people perceive, think about, and mentally organize information about the world around them.