A Lack of Trust Between Two Parties Engaged in International

question 75

Multiple Choice

A lack of trust between two parties engaged in international trade can be exacerbated by the

• A) saturation of the domestic market.
• B) similar preferences of the parties regarding how a transaction should be configured.
• C) narrowing distance between the two parties due to technological advances.
• D) problems of using an underdeveloped international legal system to enforce contractual obligations.
• E) possibility of doing business with someone with whom they have been associated for a long time.

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Definitions:

Preferences

Individual choices or inclinations towards certain products, services, or outcomes over others.

Location Subsidies

Financial incentives provided by governments to encourage businesses to set up or expand in particular areas, often to stimulate economic growth.

Public Good

A good or service offered to society's members at no cost, sponsored by either a private entity or the government with no intent of making a profit.

Marginal Cost

Marginal cost is the change in total production cost that comes from making or producing one additional unit of a good or service.