What is the term for a policy where both sides give concessions to reach a settlement acceptable to all?

• A. Arbitration
• B. Negotiation
• C. Compromise
• D. Consensus

Answer: (C)

Compromise is the idea that both sides give up some of their demands to reach a middle ground that everyone can accept. This mutual concession helps avoid a deadlock and leads to a settlement that, while not perfect for either side, works for all involved.

Arbitration involves a neutral third party who makes a decision after hearing both sides, not necessarily requiring equal concessions from each side. Negotiation is the bargaining process itself, where terms are discussed and agreed upon, but it doesn’t always require both sides to give something up to reach a settlement. Consensus means there is broad agreement from everyone, which can happen without the explicit exchange of concessions toward a settlement. So the term that best fits the description is compromise.