Trade analysis involving multinational enterprises DIFFERS from our conventional trade analysis in that multinational enterprise analysis emphasizes
A) intrafirm sales where prices are determined by factors other than a competitive pricing system.
B) the international movement of finished goods.
C) purely competitive markets rather than imperfectly competitive markets.
D) portfolio investments rather than direct foreign investments.

Question

Quizplus · Accepted Answer

Multinational enterprises engage in intrafirm sales where prices are often determined by factors other than a competitive pricing system, such as transfer pricing. This differs from conventional trade analysis where prices are determined by a competitive pricing system in purely competitive markets. Additionally, multinational enterprises may also engage in direct foreign investments rather than just portfolio investments.

Trade Analysis Involving Multinational Enterprises DIFFERS from Our Conventional Trade