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Explain what is meant by economic risk of a nation by using a specific country as an example

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Explain what is meant by economic risk of a nation by using a specific country as an example.

Also how can economic risk in this country be anticipated?

How does economic instability affect other nations?

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Solution Summary

The expert explains the economic risk of a nation by using a specific country as an example.

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Economic risk is the risk that the project's output will not generate sufficient revenues to cover operating costs and to repay obligations (http://www.investorwords.com/1646/economic_risk.html). This concept was further described by another source as " the chance that macroeconomic conditions like exchange rates, government regulation, or political stability will affect an investment, usually one in a foreign country" (http://www.investinganswers.com/financial-dictionary/economics/economic-risk-2918).
Another source noted that economic risk involves the likelihood that events, including economic mismanagement, will cause drastic changes in a country's business environment that adversely affect the profit and other goals of a particular business enterprise. The same source noted that the Philippines has high levels of economic, political and financial system risk. To address the situation, its government applied fiscal management efforts such as increased spending in the social sector, agriculture, and infrastructure.
(http://www.tradechakra.com/economy/philippines/economic-risk-in-philippines-229.php).
As applied to the nation as a whole, economic risk exists when business ...

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Elisa Valdez, PhD
Education
  • Bachelor of Science in Business Administration, University of the Philippines
  • Master in Business Administration, Saint Mary's University
  • Doctor of Philosophy in Education, University of the Philippines
  • Doctor in Business Adminstration (IP), Polytechnic University of the Philippines
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