GK
BUSINESS MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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investors look to support stable countries with strong economic performance
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export prices versus import prices
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debt owed by a government
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when a country is spending more on foreign trade than it is earning
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amount charged by a lender to a borrower for the use of their money
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Detailed explanation-1: -Political stability has a positive influence on inward FDI for developed countries. In politically unstable economies, foreign investors are hesitant to invest due to fears of sudden policy reversals, while politically stable economies are ideal for foreign investors (Brada et al. 2006).
Detailed explanation-2: -Moreover, businesses like a region that is friendly and welcoming towards them and not a hostile and unfriendly dispensation. The point here is that political instability hurts everything from profits to operations to the working conditions of the employees and hence, businesses avoid it.
Detailed explanation-3: -In fact, political stability is a key part of government efforts to attract foreign investment to their country. Businesses need to assess if a country believes in free markets, government control, or heavy intervention (often to the benefit of a few) in industry.
Detailed explanation-4: -The Gross Domestic Product (GDP) is widely accepted as the primary indicator of macroeconomic performance. The GDP, as an absolute value, shows the overall size of an economy, while changes in the GDP, often measured as real growth in GDP, show the overall health of the economy.