Question

The government of Diarmina recently passed a law that requires foreign companies to partner with Diarminian companies if they want to conduct their business in the country. Many investors and companies started to pull their funds and business out of the country because of this. This scenario exemplifies _____
A) political uncertainty
B) cost uncertainty
C) policy uncertainty
D) control uncertainty

Answer 1

Answer:

C) policy uncertainty

Explanation:

• Policy uncertainty is the class of economic risks associated with the irregular economic policy of a particular country's government. Policy uncertainty discourages investment and increases the investment risk factor of the economy.
• This can come from the regime's volatile and unpredictable monetary or fiscal policy or unpredictable regulatory framework.

so correct answer is C) policy uncertainty