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If the Income Tax Rate in a Foreign Country Where

Question 31

Multiple Choice

If the income tax rate in a foreign country where an MNC has a subsidiary is lower than the tax rate in the MNC's home-country:


A) the MNC might sell goods or services to that foreign subsidiary at higher prices to increase the income in the low-tax-rate country.
B) the MNC might sell goods or services to that foreign subsidiary at low prices to increase the income in the low-tax-rate country.
C) the MNC might sell goods or services to that foreign subsidiary at higher prices to decrease the income in the higher-tax-rate country.
D) the MNC might sell goods and services to that foreign subsidiary at prices that would allow the MNC and its subsidiary to have balanced income.

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