Asked by Pallavi Shyam on Jun 03, 2024
Verified
In comparison to direct effects, the indirect effects of political risk:
A) are the most apparent.
B) are easy to predict and prepare for.
C) result from political actions that target a specific entity.
D) are similar to collateral damage.
Indirect Effects
Consequences of a business or economic action that are not immediate or direct but occur as a secondary effect.
Direct Effects
The immediate impact of an action or policy, without considering the subsequent or secondary outcomes.
Political Risk
The risk that political conditions in a host country might change, negatively affecting foreign businesses.
- Examine the consequences of political instability on commercial activities and the approaches adopted by businesses to deal with these difficulties.
Verified Answer
AK
Amanda KarunaratneJun 05, 2024
Final Answer :
D
Explanation :
Indirect effects of political risk are akin to collateral damage because they are the unintended consequences of political actions that may not target a specific entity directly but still have an impact on it.
Learning Objectives
- Examine the consequences of political instability on commercial activities and the approaches adopted by businesses to deal with these difficulties.