Which two economic factors are most commonly used to assess a country's attractiveness as a market for investment?

• A. Labor productivity and capital intensity
• B. Natural resource availability and technological advancement
• C. Inflation rate and exchange rate stability
• D. Market size and market growth rate

Answer: (D)

Verified step by step guidance

1. Understand that assessing a country's attractiveness for investment typically involves evaluating factors that indicate potential returns and market opportunities.
2. Identify that 'market size' refers to the total potential demand or the number of consumers in the country, which affects the scale of possible sales and profits.
3. Recognize that 'market growth rate' measures how quickly the market is expanding, signaling future opportunities for increased sales and investment returns.
4. Compare these with other factors like labor productivity, capital intensity, natural resources, inflation, and exchange rate stability, which are important but often secondary to market potential in initial investment decisions.
5. Conclude that the two most commonly used economic factors to assess market attractiveness are therefore market size and market growth rate, as they directly relate to the potential for business expansion and profitability.