Suppose that an America-based multinational company set up two subsidiaries in China. The parent company signed a sales contract between the subsidiaries, which stipulated that the parent company would make the delivery to one of the subsidiaries in Shanghai, which should forward some of the goods to another subsidiary at Chengdu. Question: Is the transaction between the parent company and the two subsidiaries an international trade? Please provide your explanation.

Suppose that an America-based multinational company set up two subsidiaries in China. The parent company signed a sales contract between the subsidiaries, which stipulated that the parent company would make the delivery to one of the subsidiaries in Shanghai, which should forward some of the goods to another subsidiary at Chengdu. Question: Is the transaction between the parent company and the two subsidiaries an international trade? Please provide your explanation.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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