In attempting to choose a country for investment, firm ABC decides, to use a matrix for country…

In attempting to choose a country for investment, firm ABC decides, to use a matrix for country selection. It decides to look at the following factors: 1- economics 2-political risk, 3- cost of labor, 3- tax structure, and 4- country similarity to home country. On the scale of 1 to 10 (1 being very unattractive and 10 being very attractive) management has ranked each factor and has decided importance of each one (again 1 unimportant and 10 very important) for the company. Below is table showing management’s assessment. Company only chooses a location if its weighted average is 7 or higher. Would company ABC select country 1 or country 2?Ranking Country 1 Ranking Country 2 WeightEconomic growth 8 6 9Political Stability 4 8 7Low Labor Cost 8 6 5Attractive Tax structure 6 7 6Similarity to home country 7 9 8Discuss how equilibrium is reached in a foreign exchange market if a country has balance of payment deficit in the case of fixed and floating (flexible) exchange rate system?