Final answer:
The kidnapping of a firm's marketing VP by a foreign terrorist is a harsh example of political risk. This category reflects the uncertainties and potential negative impacts on business due to political instability or changes within a country.
Step-by-step explanation:
A foreign terrorist kidnapping your firm's marketing VP while in the host country exemplifies a case of political risk. Political risk refers to the potential for losses or additional costs that can be incurred by a business due to political changes or instability in a country. This risk can manifest through acts like terrorism, expropriation, or changes in government policies that negatively affect business operations.
The student's question also touches on related concepts such as economic development, infrastructure, international law, and social risk, but in this scenario, political risk is the most fitting category. It's important to note that the political and social landscape of a country plays a crucial role in determining the levels of risk for foreign investments and business ventures.