NOTE: Clearly indicate the QUESTION NUMBER of each question that you choose. The answer to EACH question must start on a NEW page, e.g. QUESTION 2 on a new page, QUESTION 3 on a NEW page, etc. QUESTION 2: BUSINESS ENVIRONMENTS 2.1 Give ANY THREE practical examples of political environment as a component of the macro environment

QUESTION 2: BUSINESS ENVIRONMENTS The political environment can impact businesses in various ways, and here are three practical examples: 1. **Government Policies:** Regulations such as tax laws or import tariffs can directly affect how companies manufacture, sell, and price their goods. For example, a government may implement higher tariffs on imported goods to encourage local production, altering how international companies operate. 2. **Political Stability:** A country with a stable political environment tends to attract more foreign investment. Conversely, in nations experiencing political unrest or instability, businesses may face challenges like supply chain disruptions or heightened risk of loss, which can deter investments and business operations. 3. **Trade Agreements:** International trade agreements, such as NAFTA or the EU, can create opportunities for businesses by reducing barriers and fostering cooperation. These agreements shape the competitive landscape across borders, allowing companies to expand into new markets more efficiently. --- The government and its politics have played a crucial role in shaping business practices throughout history. In many countries, the rise of regulations post-Industrial Revolution aimed to curb monopolistic practices and protect consumers. For instance, the establishment of antitrust laws in the early 20th century in the U.S. directly affected how businesses operated, promoting fair competition and preventing the consolidation of market power among a few. --- It's also essential for businesses to stay informed about political developments. One common mistake is neglecting to analyze how upcoming elections may shift the political landscape and impact local business regulations. To mitigate risks, companies should engage in proactive government relations and advocacy. Establishing strong networks and staying connected to lobbying organizations can provide a voice in political discussions that may affect their industry.