Waiting to open a factory in a country that has just had a government coup exaggerates that economic shock due to:
A) uncertainty.
B) labor adjustment costs.
C) time bunching.
D) flexible investing.

Question

Quizplus · Accepted Answer

A government coup creates a lot of uncertainty and confusion regarding the economic, political, and regulatory environment of the country. This makes it difficult for investors to make informed decisions, which can delay or even prevent investment. This delay can lead to additional economic shocks, such as increased labor adjustment costs and time bunching, which could have been avoided with flexible investing.

Waiting to Open a Factory in a Country That Has