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ACCA Applied Knowledge · Business and Technology · Political and legal factors affecting business

Zenara Co, a clothing retailer, imports most of its goods. The government of the exporting country unexpectedly imposes a 15% tax on all clothing exports to protect domestic supply. Which political factor is this?

This is a trade policy or trade barrier factor. The exporting government is using a tax to restrict the flow of goods across borders, which raises Zenara's costs. It is not about political stability, employment law or consumer protection, which concern different aspects of the political and legal environment.

  1. ATrade barrier or trade policyCorrect
  2. BPolitical stability
  3. CEmployment legislation
  4. DConsumer protection law

Explanation

A tax on exports is a government trade policy measure that affects international trade, so it is a trade barrier or trade policy factor. Political stability concerns the risk of changes of government or unrest. Employment and consumer laws regulate workers and customers, not cross-border trade flows.

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