Arbitrage

question 14

Multiple Choice

arbitrage

• A) arises when subsidiary profits vary due to local regulations
• B) occurs when firms move funds to lower tax jurisdictions
• C) arises when barriers to trade exist
• D) occurs due to the incidence of capital flight

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Definitions:

Mustangs

Wild horses in the Western United States, descended from horses brought to the Americas by Spanish explorers.

Law of Demand

A fundamental economic principle stating that, all else being equal, as the price of a good increases, consumer demand for the good decreases, and vice versa.

Average Price

The mean price of a good or service, calculated by dividing the total revenue by the quantity sold.

Equilibrium Price

The cost at which the amount of a product consumers want to buy matches the amount producers are willing to sell, leading to equilibrium in the market.