What is one of the main economic consequences of political instability?
a) Increased foreign investment
b) Economic uncertainty and reduced growth
c) Strengthened national currency
d) Lower inflation rates
How does political instability affect foreign direct investment (FDI)?
a) Increases investor confidence
b) Attracts more multinational companies
c) Leads to capital flight and reduced investments
d) Has no impact on investment decisions
What happens to a country’s currency value during prolonged political instability?
a) It strengthens due to increased investor confidence
b) It remains unaffected
c) It depreciates due to lack of trust in the economy
d) It becomes more stable
Which sector is most vulnerable to political instability?
a) Agriculture
b) Tourism and foreign investment
c) Local grocery stores
d) Home-based businesses
How does political instability affect economic growth?
a) It accelerates GDP growth
b) It leads to slower economic development and stagnation
c) It has no effect on GDP
d) It encourages business expansion
What impact does political instability have on unemployment rates?
a) Unemployment rates tend to rise
b) More job opportunities are created
c) Employment remains unaffected
d) It reduces layoffs and downsizing
Which economic indicator is most likely to be affected by political uncertainty?
a) Consumer Price Index (CPI)
b) Exchange rates and inflation
c) Rainfall levels
d) The number of tourists
Why do businesses hesitate to expand during political instability?
a) They expect higher government incentives
b) They fear higher risks and economic downturns
c) They receive more loans from banks
d) They experience an increase in profits
Which financial market is most affected by political instability?
a) Stock market
b) Agricultural sector
c) Local street markets
d) Small businesses
What effect does political instability have on inflation?
a) It stabilizes inflation
b) It decreases inflation rates
c) It causes inflation to rise unpredictably
d) It has no effect on inflation
How does political unrest influence investor confidence?
a) It boosts investor confidence
b) It discourages investment due to uncertainty
c) It has no effect on investments
d) It encourages higher risk investments
What is the impact of political instability on national debt?
a) National debt tends to decrease
b) National debt often increases due to reduced revenue
c) It has no impact on a country’s debt
d) It helps governments attract more international loans
How do frequent changes in government policies affect businesses?
a) They create a stable business environment
b) They cause uncertainty and hinder long-term planning
c) They make businesses more profitable
d) They increase consumer confidence
What is the relationship between political instability and corruption?
a) Political instability often leads to increased corruption
b) Corruption decreases in unstable governments
c) Political instability eliminates corruption
d) Political stability increases corruption
Which of the following industries is least affected by political instability?
a) Tourism
b) International trade
c) Healthcare
d) Local food markets
How does political instability impact international trade agreements?
a) It strengthens trade relationships
b) It weakens trade agreements and reduces exports
c) It has no effect on global trade
d) It leads to an increase in trade deals
What is a possible outcome of political instability in developing countries?
a) Economic growth and stability
b) Reduced foreign aid and investment
c) Increased industrialization
d) Strengthened financial markets
Which of the following is a long-term consequence of political instability?
a) Strengthened financial institutions
b) Decline in infrastructure investment
c) Reduction in government debt
d) Increased employment opportunities
How does political instability affect public services?
a) Public services improve due to government focus
b) Public services decline due to reduced government revenue
c) It has no effect on public services
d) It encourages more investment in healthcare and education
Which financial institution is most impacted by political instability?
a) Central banks
b) Local grocery stores
c) Private schools
d) Sports clubs
What happens to government spending during periods of political unrest?
a) Spending increases to stabilize the economy
b) Spending remains constant
c) Spending decreases as tax revenues decline
d) Governments eliminate all spending
How does political instability impact wages?
a) Wages tend to stagnate or decrease
b) Wages rise due to economic expansion
c) Wages remain unaffected
d) Wages double due to inflation
What effect does political instability have on government bonds?
a) Increases investor confidence in bonds
b) Reduces demand for government bonds
c) Has no impact on bond markets
d) Leads to higher bond prices
How does political instability affect consumer confidence?
a) Increases confidence in spending
b) Reduces consumer confidence, leading to lower spending
c) Has no effect on spending behavior
d) Encourages luxury purchases
Which global economic institution helps stabilize economies affected by political instability?
a) World Bank
b) FIFA
c) UNESCO
d) Red Cross
