Gilda's Art Gallery Rewards Its Employees with Stock Each Year

question 166

Multiple Choice

Gilda's Art Gallery rewards its employees with stock each year the gallery makes profits. This stock allows the employees to own part of the gallery. This practice is known as

• A) the principle-agent problem.
• B) incentive pay.
• C) minimizing implicit costs.
• D) minimizing explicit costs.

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Definitions:

Payroll Tax

Fees levied on employers or their employees, customarily figured as a percentage of what staff are paid.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, representing the percentage of tax applied to your next dollar of taxable income.

Gross Domestic Product

The total value of all goods and services produced over a specific time period within a country's borders.

Federal Government

The national government of a federated state, which encompasses the overall governing institutions and political authority of the country.