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Why is policy continuity useful in long-term investment decisions?

Answer and explanation

Correct answer: It increases confidence in future planning

The direct answer is A: policy continuity increases confidence in future planning. Policy continuity means that important government rules, taxes, permissions, and regulations do not change suddenly and repeatedly. A long-term investor must estimate future costs, demand, returns, and risks. Stable policies make these estimates more dependable, so the investor can plan with greater confidence. Option A is correct because predictable rules support long-term investment decisions. Option B is wrong because policy continuity does not mean that all taxes disappear; taxes may still exist. Option C is wrong because stable policy cannot automatically invent or create technology. Technology requires research, skills, money, and effort. Option D is wrong because government policy cannot fix every customer’s income; customer income depends on many economic and personal factors. The key chain is: continuity, predictability, confidence, and better investment planning. Exam cue: whenever the question mentions long-term investment, connect stable policy with reduced uncertainty.

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Business-EnvironmentPolitical-EnvironmentClass-12Medium

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