Question

In recent years, the federal government has moved to "normalize" relations with China by, among other moves, supporting China's entry into the WTO. This action has opened a vast potential market and source of "cheap" labor in American firms. The government's action is an example of how foreign ventures can be affected by domestic:

a.) Political policy.

b.) Legal policy.

c.) Technological policy.

d.) Currency policy.

Answer 1

The answer is given below:

a.) Political policy.

The political forces plays a major role in international business environment right from framing business policies to industry policy, to trade policy, fiscal policy etc. political forces play a major role.

These policies can be changed, controlled and imposed only by the government which in turn affects the currency, exchange rates, interest rate etc.

Only due to political policies China could enter US