Transfer pricing may be used to offset the volume effects of foreign exchange quotas.

Question

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Transfer pricing is the practice of setting prices for transactions between related entities in different countries, and it can be used to manage and manipulate profits and taxes. In the context of foreign exchange quotas, transfer pricing can help companies offset the effects of restricted currency availability by shifting profits to subsidiaries or affiliates in other countries where currency is more abundant. This can help companies maintain sales volumes and profitability in the face of currency constraints.

Transfer Pricing May Be Used to Offset the Volume Effects