Suppose an MNC subsidiary buys 100 input units from its parent at a price of $2 each. It has $300 in additional production costs, and sells its 100 units of output for $6 to the MNC. It pays a 25% local profit tax
The MNC sells the output at home for $8, and its cost of producing inputs is $1 . It pays a profit tax of 20% at home on repatriated profits. What is the subsidiary net profit? Assume no selling costs at home. What is the MNC's total profit from the operation?
$75; $360
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The two main approaches to measuring GDP are the
A. income approach and the expenditure approach. B. government approach and the consumer approach. C. flow approach and the stock approach. D. concept approach and the reality approach.
When there are two large open economies, the world real interest rate will be such that
A. desired international lending by one country equals desired international borrowing by the other country. B. desired international lending will be the same in both countries. C. desired international lending and borrowing will be zero in both countries. D. desired international borrowing will be the same in both countries.