Which of the Following Best Summarizes the Peter Principle

question 28

Multiple Choice

Which of the following best summarizes the Peter Principle?

• A)Most executives fear changing the status quo, so they promote based on seniority not competence.
• B)A person's level of competence determines how high he or she rises in a firm's hierarchy.
• C)People are eventually promoted to positions that are beyond their levels of competence.
• D)A person's competency is too difficult to determine, so promotions are based on seniority.

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Definitions:

Discount Rate

The interest rate that an eligible depository institution is charged to borrow short-term funds directly from a central bank.

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Expected Profit

The anticipated earnings from an investment or business venture after accounting for potential risks and expenses.

Loanable Funds

The total amount of capital available for borrowing, comprised of savings from individuals, businesses, and government, which is available for investment purposes.