Question

Which of the following factors in a country is most likely to cause political risk for an international business? high living standards presence of more than one ethnic nationality low level of government debt low inflation rate infrequent changes in government and government policy

Answer 1

Answer: More than one ethnic nationality.

Explanation: Political risks are risks that are associated with politics and political activities. Politics are sets of Activities or actions put in place to establish Government in a country.

One of the factors that enables political tension and risks arise as a result of improper representation by various ethnic groups in a country, this will pose a political threat to Businesses.

If one ethnic group have a higher representation than others it will result to agitation and possibly lead to tension in a country. Exams includes countries like South Sudan,Nigeria etc