Author Question: One arguments for free trade suggests that opening up the home market increases ____ , thus lowering ... (Read 72 times)

bucstennis@aim.com · **on:** Jun 29, 2018

One arguments for free trade suggests that opening up the home market increases ____ , thus lowering prices for local consumers.
a. tourism c. substitutes
b. competition d. inflation

Question 2

Why do low-income countries often criticize the use of transfer pricing?
a. It is a way for firms to evade taxes.
b. The transfer price is often used to dump product on the market.
c. Transfer pricing ignores exchange rates.
d. Transfer pricing depletes much needed soft currency reserves.

amandalm · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B
Other arguments for free trade suggest that opening up the home market increases competition, thus lowering prices for local consumers.

Answer to Question 2

A
Low-income countries argue that transfer pricing helps a company under-report profits, which decreases their tax burden: Firms use transfer pricing to evade taxes.