Question

____ occurs when government agency or business contracts with a company to produce a good or perform a service that it once produced or performed itself.

A. offshoring
B. Outsourcing
C. Capitalism
D. Central planning

Answer 1

Outsourcing. When a business outsources a process (e.g. manufacture of a part or an item) or a function (e.g. payroll), it hands over regulated control by way of contract to another organization. This organization to which the process or function is outsourced now is primarily responsible for the efficient completion of the task subject to the performance conditions of the outsourcing contract.