An Advantage of Netting of a Multinational Corporation and Its

question 49

Multiple Choice

An advantage of netting of a multinational corporation and its subsidiaries is that it:

• A) increases foreign exchange risk.
• B) decreases the total volume of inter-subsidiary fund flows.
• C) increases the total amount of currency conversion.
• D) decreases the number of employees.

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Definitions:

Equity

The concept of fairness in economics, which may refer to ownership interest in a company (as in stockholders' equity) or to a principle of justice and fairness in the distribution of wealth and resources.

Deadweight Loss

A societal expense arising from market inefficiency, happening when there is a mismatch between supply and demand.

Equilibrium

A state in a market where the supply of a good matches its demand, resulting in stable prices.

Progressive Income Tax

A tax system in which the tax rate increases as the taxable amount increases, leading to higher earners paying a higher rate of tax on their income.