Study the following macroeconomic situation of Nepal and answer the questions followed: This case study examines two countries with different economic conditions. Country A represents a wealthy…

Study the following macroeconomic situation of Nepal and answer the questions followed: This case study examines two countries with different economic conditions. Country A represents a wealthy developed nation, while Country B represents poor and developing nation facing many economic challenges. Both countries are looking for investors, but they offer different opportunities and risks. Country A has a total economy worth $2.5 trillion with 45 million people, and average income of $55,556 per year. This country has been stable for many decades and has strong government institutions. The people are well-educated, most of them speak English as a second language. It makes them easy to operate foreign business. Country B has comparatively low GDP, much smaller economy, worth only $180 billion despite having 38 million people. This means the average person earns only $4,737 per year. Though the country became independent 30 years ago, it is still building its government system. Country A has good infrastructure that facilitates in businesses with strong communication network of the population got internet facilities with very high speeds. Electricity is available 24 hours a day throughout the country, and the country has smooth highways and large, modern ports. In contrast, Country B struggles with poor infrastructure. Only 35% of people have reliable internet access, electricity cuts happen almost daily. Many roads are in bad condition, and the country has only two small ports that get overcrowded, causing long delay. Country A has a very advanced financial system with over 800 companies listed on the stock market and daily trading worth billions of dollars. Banks offer loans at low interest rates of 4-5% to good businesses. The central bank keeps inflation at low rate of at 2-3% per year. Country B's financial system is basic, with only 25 companies on the stock market, and some days, no trading happens at all. Banks charge high interest rates of 15-18%, and the central bank often prints too much money, causing inflation of 8-15% per year. Country A follows smart economic policies with government debt at only 45% of the economy's size, corporate tax rates around 25%, and free trade agreements with several countries. The government invests heavily on education and research. Country B's government spends much more money than it collects, creating budget deficits of 8% per year. Government debt has increased to 85% of the economy's size, tax rates hiked to 40%, and trade policies changed frequently based on politics. Looking at key economic indicators, Country A shows strong performance with 3-4% GDP growth, 4% unemployment, a balanced government budget, 2-3% interest rates, and $500 billion in foreign reserves. Country B shows weak performance with only 1-2% GDP growth, 18% unemployment, 8% budget deficit, 12-15% interest rates, and dangerously low foreign reserves of only $8 billion. Foreign direct investment flows show a clear preference for Country A, which attracts about $150 billion per year from international companies because of the stable environment, skilled workforce, and good infrastructure. Country B receives much lower investment at only $5 billion per year as companies are scared away by poor infrastructure, political uncertainty, and currency instability. Questions: a. Identify the major issues in a given case. b. Assess the demand-side and supply-side business environment for foreign direct investment by comparing the macroeconomic indicators, government policies(spending, taxes, trade rules), infrastructures, banking systems, and stock markets of these two countries. c. If you were advising someone on establishing a new business venture, which country would you recommend by considering the costs, benefits, and risks of each country, and give specific reasons using examples from the case study? [4+(5+5)+6]