In Most Profit-Sharing Plans, About __________ of the Net Profit

question 10

Multiple Choice

In most profit-sharing plans, about __________ of the net profit is shared.

• A)5 to 10 percent
• B)10 to 15 percent
• C)15 to 20 percent
• D)20 to 25 percent

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Definitions:

Government Failure

A situation in which the structure of incentives is such that the political process, including democratic political decision-making, will encourage individuals to undertake actions that conflict with economic efficiency.

Market Failure

A situation in which the structure of incentives is such that markets will encourage individuals to undertake activities that are inconsistent with economic efficiency.

Economic Incentive

A financial or material benefit that motivates individuals or businesses to pursue certain actions or behaviors.

Rent Seeking Activities

Efforts by individuals or firms to gain access to economic rent through manipulation or exploitation of the economic system, not through productive activities.