$19-$Identify one reason why a country's political factors would matter to a potential investor.

a$.$ Political factors such as distribution of wealth and currency stability are determined by the

ruling government.

b$.$ Political factors such as exchange rates and telecommunications are determined by the

ruling government.

c$.$ Political factors affect political stability and internationalisation of markets as suggested by

the theory of absolute advantage.

d$.$ Political factors shape an investor's risk of losing assets, earning power or managerial

control due to the actions of host governments or political events.

$20-$ ASN Technologies, a software company based in the country Liasia, is planning to expand

by purchasing Terrabits Inc., a software company in the country Saintande. After extensive

research, ASN Technologies' management discovers that government attitudes towards

foreign direct investment are unfavourable in Saintande, as is the attitude of the country's

population towards foreign companies and staff. The management also discovers that

power supply in the areas surrounding Terrabits is unstable and company taxation rates are

very high. As a result, the management decides to shelve the idea of purchasing Terrabits.

Which of the following is a technological factor that affected the company's decision?

a$.$ The instability of power supply in the areas surrounding Terrabits

b$.$ Attitudes towards foreign companies and staff

c$.$ Attitudes towards foreign direct investment

d$.$ The corporate tax rate for private companies