Since Each Subsidiary May Be More Concerned with Its Own

question 2

True/False

Since each subsidiary may be more concerned with its own operations than with the overall operations of the MNC, a centralized management group may need to monitor the parent-subsidiary and intersubsidiary cash flows.

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Definitions:

Positive

Characterized by or displaying affirmation, constructive attributes, or optimism; also in economics, indicating numbers or conditions above zero or in surplus.

Complementary Goods

Products or services that are typically consumed together, as the consumption of one enhances the value or desire for the other.

Normal Good

A category of product that sees a rise in demand when consumer incomes go up, and a decrease when incomes fall.

Cross Elasticity of Demand

A measure of how the quantity demanded of one good responds to a change in price of another good, indicating the degree of substitutability between the two goods.