Question

Rankings of countries throughout the world by potential political risks typically place Scandinavian and European countries such as Norway, Sweden, Switzerland, Luxembourg and Denmark near the top of the list, meaning that companies engaging in business in these countries face the least number of potential political risks

A. True
B. False.

Answer 1

True

Step-by-step explanation:

Political instability is a risk to a business. For a business to thrive, the economy should be free from political unrest or turbulence. Countries that experience political turmoils are characterized by civil unrest, violence and rooting, and industrial actions that result in low economic growth.

Political stability gives confidence to investors that their investments are protected by the government and will grow. The economy of a politically stable country can be predicted many years into the future. Many investments need a long time to break even and make returns. Political unrest cause massive destruction of properties and business. Investors in stable countries are assured of their safety and the safety of their investments.