Question

The government of Diarmina recently passed a law that requires foreign companies to partner with Diarminian companies if they want to conduct their business in the country. Many investors and companies started to pull their funds and business out of the country because of this. This scenario exemplifie__________

Answer 1

Policy uncertainty

Step-by-step explanation:

Policy uncertainty is a class of economic risks associated with erratic economic policy of the government of a particular country. Policy uncertainty discourages investment and raises the investment risk factor of an economy.

It can come from unstable and unexpected monetary or fiscal policy of a regime or unpredictable regulatory framework.