Markets reacted positively to the United States Mexico Canada Agreement (USMCA) as a replacement for NAFTA. If the agreement failed to be ratified by congress, the resulting negative economic impact would be an example of __________.

Question

Quizplus · Accepted Answer

Political risk refers to the uncertainty and potential financial loss businesses and investors face due to changes in the political environment or government policies. The failure of the USMCA to be ratified by Congress, leading to negative economic impacts, is a direct consequence of political decisions and actions, thus exemplifying political risk.

Markets Reacted Positively to the United States Mexico Canada Agreement