Answer to Question #72274 in Macroeconomics for lilin

Question

Does unemployment rate or general government revenue determine why investors should invest in the country? And why it affects?

Answer 1

Yes, the unemployment rate in a country determines the investment in the country since unemployment is the lagging indicator of an economy. If few people have jobs, it means that there is little disposable income; hence, investors will not have many customers. Thus, there will be a low investment in that country. Similarly, a small general government revenue implies that there is little expenditure by the government and investments in that country would most likely be unprofitable. Besides, the government will not be able to invest in various sectors of the economy, corresponding to low investments.