To Build Trust in a Cooperative Relationship, Both Firms Can

question 52

Multiple Choice

To build trust in a cooperative relationship, both firms can:

• A) rely on competitive bidding.
• B) make mutual investments in specialized assets.
• C) write short-term contracts that must be renewed frequently.
• D) increase their vertical integration.
• E) use outsourcing of noncore activities.

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Definitions:

Free Trade Policy

A governmental policy aimed at eliminating barriers to trade between countries, such as tariffs and import quotas.

International Trade

The exchange of goods and services across international borders or territories, which allows countries to expand their markets for both goods and services that otherwise may not have been available domestically.

Import Restrictions

Government-imposed limits or tariffs on the number or value of goods that can be imported into a country, typically to protect domestic industries.

Purchasing Power

The worth of a currency depicted by the quantity of goods or services that can be purchased with one unit of the currency.