What is the LEAST likely reason that MNEs set arbitrary transfer prices?
A) take advantage of tax differences between countries
B) achieve economies of scale on a global level
C) circumvent national controls
D) manipulate profits
Question 2
Which of the following is conducive to low transfer prices from the parent company to a foreign subsidiary and high transfer prices to the parent company from a foreign subsidiary?
A) political instability
B) restrictions on profit or dividend remittances
C) restrictions in the subsidiary country on the value of imported products
D) desire to mask the profitability of the foreign subsidiary to keep competitors out
Question 3
The balanced scorecard is ________.
A) an average of foreign-exchange rates
B) an approach to performance measurement
C) used widely by U.S. firms but not European firms
D) not very successful at linking financial and nonfinancial performance
Question 4
A pull rather than a push strategy is most likely preferable when ________.
A) self-service is not predominant
B) the price of a product is high relative to incomes
C) there are few governmental restrictions on advertising
D) there are a large number of languages and a low literacy rate
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