Import quotas that limit the quantities of goods that a domestic subsidiary can buy from its foreign parent company represent which type of barrier to the parent company?
Import quotas are government-imposed restrictions on the quantity of goods that may be imported. They represent a political barrier because they arise from government policy, regulation, trade protection, or national economic objectives. A tariff is a tax or duty on imported goods; quotas are non-tariff barriers, so Option D is incorrect. Financial barriers relate to capital availability, exchange controls, credit restrictions, or financing limitations. Social barriers relate to culture, demographics, consumer behavior, or public attitudes. Internal auditors reviewing multinational operations should consider political barriers because they can affect supply chains, transfer pricing, production planning, compliance, and profitability. Since the restriction comes from government-imposed import limits, Option A is correct.
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