Question

A __________ is a type of purchasing contract in which the price of a good or service is tied to the cost of some key input(s) or other economic factors, such as interest rates.

Answer 1

The correct word for the blank space is: Cost-based contract.

Step-by-step explanation:

Cost-based contracts are those in which the contractor performs a piece of work and, at first, assumes all the costs of the work -and its variations- that are refunded at the end of it adding the additional profits of labor hand. Contractors present evidence of the expenses in the form of invoices so the other party involved in the contract can pay for them. These contracts are signed to incentivize contractors' performance instead of choosing a contractor based on low costs offered.

Answer 2

Cost-based contract

Step-by-step explanation:

A cost-based contract is tied to various factors which can change the overall price of a good or service. Likewise, the only difference between the cost-based contract and the fixed-price contract is the change in the price during the contract. A price can change in a cost-based contract because of inputs and economic factors such as exchange rate or interest rate.