Answer:
Increase in current account deficit.
Explanation:
If a country's total net savings e.g. total of government and private savings are less than the total domestic investment so this deficit must be financed by foreign capital in the form of borrowing. Foreign borrowing results in capital account surplus ultimately increasing trade deficit.
High rate of domestic investment while no change in savings results in or increase in current account deficit. The main reason is that low private or government savings as compared to private investment in domestic capital requires foreign investment.
Answer:
political risk.
Explanation:
political risk: This is risk or changes in government policy that adversely affect the fortune of companies operating in a country. Since Italian government expropriated the company paid only €80,000 as again €125,000 that the company worth. The company has suffered political risk.
Exchange rate risk or currency risk: It is a risk arising from frequent changes in exchange rate or amount in which a country's currency can be exchange for another currency. Since exchange rate remain the same i.e. $1.25 = €1.00, exchange rate risk did not occurred.
Answer:
$ 197 541
Explanation:
Thinking process:
Number of employees = 480
Recruiting costs incurred for the year = $ 5 000
The total cost for the 480 employees = $ 5 000 × 480
= 2 400 000
Then the turnover rate = 6.3314%
= 0.063314
The amount due to the turnover = 0.063314×2 400 000
= $ 197 541
