IGCSE Economics Paper-2: Specimen Questions with Answers 21 - 21 of 100

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Total of credit side of the balance of payment should always equal the debit side.

Question 21 (5 of 5 Based on Passage)


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What is the code of conduct to guide and regulate MNCs?


The Principal Element of an International Regime for Investment Should Include

  • A framework to allow developing countries as well as transnational corporations to benefit from direct investments on terms contractually agreed upon. Home countries should not restrict investment or the transfers of technology abroad and should desist from other restrictive practices such as exports control.
  • Legislation promoted and coordinated in home and host countries, to regulate the activities of transnational corporations in such manner as ethical behavior, disclosure if information, restrictive business practices, cartels, anti- competitive practices, and labor standards.
  • Cooperation by the government in their tax policies to monitor transfer pricing and to eliminate the resort to tax havens.
  • Fiscal and other incentives and policies towards foreign investment to be harmonized among host developing countries, particularly at regional and sub regional levels to avoid the undermining of tax base and competitive position if host country.
  • An international procedure for discussions and consultations on measures affecting direct investment and the activities of transnational corporations.

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