Which of the Following Statements Is True Regarding a Defined

question 5

Multiple Choice

Which of the following statements is true regarding a defined contribution pension plan?

• A) The pension benefits to be received by the employee during retirement are defined in the plan.
• B) Defined contribution plans have the more complex accounting issues than defined benefit plans.
• C) Defined contribution plans do not define the benefits that the pension plan must pay to retired employees.
• D) Employers that use defined contribution plans are assuming more risks than employers that use defined benefit plans.

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Definitions:

Price Elasticity

A measure of how much the quantity demanded or supplied of a product changes in response to a change in its price.

Inelastic

A description of a situation where the quantity demanded or supplied changes by a smaller percentage than the changes in price.

Demand Sensitive

Reacting to changes in consumer demand, often affecting pricing and production decisions.

Long-Run Demand

The overall demand for a product or service over an extended period, considering changes in market conditions and preferences.