The government of Gimzia recently passed a law making it mandatory for any foreign company that wants to do business in Gimzia to reinvest 70% of the revenue it is earning back into the country. As a result, many foreign companies are planning to shut down their ventures in the country. This is a type of _____ faced by companies that want to conduct business in Gimzia.
A) political uncertainty
B) cost uncertainty
C) policy uncertainty
D) control uncertainty

Question

Quizplus · Accepted Answer

The type of uncertainty faced by companies wanting to do business in Gimzia is policy uncertainty, as the government has passed a new law requiring reinvestment of 70% of revenue. This policy uncertainty has made many foreign companies wary of doing business in Gimzia due to the potentially higher costs and risks associated with investing in a country with uncertain policies. Political uncertainty refers to instability in the government, while cost uncertainty and control uncertainty are not relevant to the situation described.

The Government of Gimzia Recently Passed a Law Making It