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

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

Answer: (C)

Verified step by step guidance

1. Understand that when assessing a country's attractiveness for investment, economists and investors look for factors that indicate potential profitability and market opportunity.
2. Recognize that 'Market size' refers to the total potential demand or number of consumers in the country, which affects the volume of sales an investor can expect.
3. Identify that 'Market growth rate' measures how quickly the market is expanding, signaling future opportunities for increased sales and profits.
4. Compare these with other factors like government spending, exchange rate stability, natural resources, technological advancement, labor productivity, and capital intensity, which may influence investment decisions but are not the primary indicators of market attractiveness.
5. Conclude that the two most commonly used economic factors to assess market attractiveness are 'Market size' and 'Market growth rate' because they directly relate to the potential for sales and profit growth.