Question

The government of Gimzia recently passed a law making it mandatory for any foreign company that wants to do business in Gimzia to reinvest 70% of the revenue it is earning back into the country. As a result, many foreign companies are planning to shut down their ventures in the country. This is a type of _____ faced by companies that want to conduct business in Gimzia.

Answer 1

The correct answer here is policy uncertainty, which companies are facing in Gimzia.

Step-by-step explanation:

Policy uncertainty which is also know as regime uncertainty , is a type of economic risk which companies faces because of the uncertainty in the government policy ( it can be both monetary or fiscal policy ) , and due to these uncertain policy's companies usually stop their investment in their firms which are established in these countries or just down doing business in such countries as in this case foreign companies are doing in Gimzia.