Which of the Following Is NOT a True Statement About

question 8

Multiple Choice

Which of the following is NOT a true statement about relational contracts?

• A) A relational contract has unenforceable elements.
• B) A relational contract must be self-enforcing in order to be effective.
• C) In order to work,a relational contract must have long-term benefits of adhering to the contract that are greater than the short-term gains of breaking the contract.
• D) A relational contract is based on reputation.
• E) A relational contract includes only verifiable information.

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Definitions:

Earnings

The amount of money received by an individual or organization in return for labor or services provided, or from investments.

Utility Function

A mathematical model representing an individual's preference ordering over a set of goods or outcomes.

Consumption

Consumption refers to the use of goods and services by households. It is an important component of GDP and economic analysis.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual rate.