4.2.2 Assessment of a Country as a Market

• What do economic indicators reflect about a country's economy?

  Its stability and growth
• A high GDP indicates a strong economy with more potential for growth
• High inflation reduces consumer spending due to decreased purchasing power.
• How do low interest rates affect business growth?

  Encourage investment and spending
• A low unemployment rate suggests a healthy economy with a stable labor market
• What does disposable income measure?

  Income after taxes
• Order the steps a business takes to understand economic indicators for market entry decisions.

  1️⃣ Identify key economic indicators

  2️⃣ Analyze the purpose of each indicator

  3️⃣ Assess the implications for business expansion

  4️⃣ Make informed market entry decisions
• Match the economic indicator with its purpose:

  GDP ↔️ Measures total economic activity

  Inflation ↔️ Measures the rate of price increase

  Interest Rates ↔️ Measures the cost of borrowing money

  Unemployment Rate ↔️ Measures the percentage of the workforce without jobs
• A low GDP indicates a weak economy with limited growth potential.

  False
• How do high interest rates affect business expansion?

  Increase borrowing costs
• Higher disposable income leads to increased consumer demand
• Economic indicators alone are sufficient for making market entry decisions.

  False
• Political and legal factors significantly impact a country's attractiveness for business expansion
• How does political stability affect business investment?

  Encourages investment
• Lower taxation policies can attract businesses
• Match the political and legal factor with its impact on business:

  Political Stability ↔️ Encourages investment

  Legal Framework ↔️ Promotes business growth

  Taxation Policies ↔️ Lower taxes attract businesses

  Trade Policies ↔️ Liberal trade boosts exports
• Order the steps a business takes to assess political and legal factors for market entry decisions.

  1️⃣ Evaluate political stability

  2️⃣ Analyze the legal framework

  3️⃣ Assess taxation policies

  4️⃣ Examine trade policies
• What is the primary impact of political and legal factors on business expansion?

  Attractiveness for expansion
• Political stability, characterized by consistent government policies, encourages investment
• Favourable laws and regulations governing business promote growth.
• What is the impact of lower taxes on businesses and individuals?

  Attracts businesses
• Liberal trade policies, which reduce tariffs and regulations, can boost exports
• Steps to assess political and legal factors affecting business expansion

  1️⃣ Evaluate political stability

  2️⃣ Analyze legal framework

  3️⃣ Review taxation policies

  4️⃣ Assess trade policies
• Why is a country with a stable government and favourable business laws likely to attract foreign investment?

  Encourages business growth
• Political and legal factors complement economic indicators in assessing a country's viability for expansion.
• What does 'market size' refer to in business expansion planning?

  Total demand for product
• Market growth potential indicates the expected increase in demand
• High market saturation may limit growth opportunities for businesses.
• How can intense competition affect profitability in a growing market?

  Reduces profitability
• Match the key aspect of market growth with its definition:

  Market Size ↔️ Total demand for a product

  Market Growth Potential ↔️ Expected increase in demand
• What do economic indicators reflect about a country's economy?

  Economic performance
• High GDP indicates a strong economy with growth potential
• High inflation erodes purchasing power.
• What is the effect of low interest rates on investment and spending?

  Encourages investment and spending
• A low unemployment rate suggests a healthy economy
• Higher disposable income leads to increased consumer demand.
• Match the economic indicator with its purpose:

  GDP ↔️ Measures total economic activity

  Inflation ↔️ Measures rate of price increase

  Unemployment Rate ↔️ Measures percentage without jobs
• Inflation measures the rate of price increase
• Low interest rates encourage investment and spending.
• Economic indicators provide businesses with insights into a country's growth potential.