ACCA Strategic Business Leader (SBL) Practice Exam

What do the factor conditions indicate regarding a country's competitiveness?

1. They reflect government policies only.

2. They describe the country's resources and investment strategies.

3. They are based solely on historical economic performance.

4. They focus entirely on taxation and labor laws.

The correct answer is: They describe the country's resources and investment strategies.

The correct answer highlights that factor conditions encompass the resources and investment strategies available within a country, which are crucial for its competitiveness. Factor conditions refer to the nation’s endowments in various factors such as natural resources, skilled labor pool, capital resources, and infrastructure. These conditions determine how well a country can support and develop its industries, innovate, and attract investment. For instance, a country with a highly educated workforce, advanced technology, or abundant natural resources can leverage these advantages to create a competitive edge in specific industries. Investment strategies also play a vital role since they reflect how effectively these resources are harnessed for growth and development. Thus, a country’s competitiveness is significantly shaped by how these factors are developed and utilized. The other options either narrow the scope too much or inaccurately portray the broader picture of competitiveness. For example, focusing solely on government policies, historical performance, or taxation and labor laws misses the comprehensive nature of the factor conditions that include not only policies but also the innate resources and the ecosystem for investment. This broader perspective is essential for understanding why certain countries excel in particular sectors.