1.

Explain political and legal causes of business risks.

Answer»

The causes of business risk include: 

1. Changes in government policies regarding foreign trade 

2. Entry of multinational companies 

3. Changes in laws affecting the business like licensing, taxation etc. 

4. Changes in consumer laws and labour laws. 

For example, an increase in tax rates may reduce profit margin of the business or an increase in minimum wages may increase labour cost for the business.



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