Widget Corp.,a manufacturing firm in Lithuania,exports its manufactured tools to Wales.To protect its domestic firms,the Government of Wales imposes a 20 percent tax on the tools imported from Widget Corp.Therefore,Widget Corp.is subject to:
A) formal institutional frameworks erected by the host-country government.
B) formal institutional frameworks erected by the home-country government.
C) informal rules of the game erected by the host-country government.
D) informal rules of the game erected by the home-country government.

Question

Quizplus · Accepted Answer

The 20 percent tax imposed by the Government of Wales is a formal institutional framework, as it is an official policy or regulation set by the host-country government to protect its domestic firms.