Final answer:
International business contracts reduce uncertainties using clauses such as reputations, guarantees, warranties, and service contracts to assure product quality, while licenses and certifications ensure competency in labor, and cosigners and collateral offer security in finance.
Step-by-step explanation:
International business contracts often incorporate specific clauses to reduce uncertainties by addressing the risks associated with imperfect information. To reduce such uncertainties, parties may use reputations, guarantees, warranties, and service contracts to assure the quality of products or services. For example, sellers can provide guarantees or warranties to reassure buyers about the quality and authenticity of items like emeralds or the reliability of used cars.
In labor markets, occupational licenses and certifications ensure competency, while in the financial capital market, cosigners and collateral serve as security against unforeseen, detrimental events. Furthermore, international agreements can help balance domestic and global interests, emphasizing the overall gains to a nation over individual business losses due to international competition.