An MNC Considers Direct Foreign Investment in Germany

question 34

Multiple Choice

An MNC considers direct foreign investment in Germany. It is mainly concerned with the subsidiary's ability to generate sufficient sales there. The country risk characteristic that would best address this concern is:​

• A)the host government's tax rates charged on remitted earnings.
• B)the possibility of blocked funds.
• C)the state of the economy in Germany.
• D)the possibility of a withholding tax imposed by the German government.

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Definitions:

Gang Labor

A system of labor, often used on plantations, where enslaved people were grouped into units or gangs for work, typically in agriculture.

Farm Prices

This term generally refers to the cost or price levels of agricultural products and commodities, which can significantly affect the economy.

Sharecropping Contract

An agricultural system prevalent after the Civil War where landowners allowed tenants to use the land in return for a portion of the crops produced on their portion of land.

Economic Slavery

Describes a condition where individuals are so financially indebted or economically constrained that they have no choice but to work for minimal pay, effectively being bound to their employers.