Which of the Following Is True of Workers' Compensation

question 25

Multiple Choice

Which of the following is true of workers' compensation?

• A)employees are compensated for workplace injuries and illnesses as long as the employer's negligence played a part
• B)experience rating provides employers with a strong incentive to prevent injuries by making the workplace safer
• C)because employees are hurt through no fault of their own, workers' compensation is designed to replace all of the income lost due to inability to work
• D)employers can always avoid paying workers' compensation if it can be shown that the employee's own careless actions contributed to the injury
• E)none of the above

---

Definitions:

Corporations

A business firm owned by shareholders who possess ownership rights to the firm’s profits, but whose liability is limited to the amount of their investment in the firm.

Partnerships

A legal form of business operation between two or more individuals who share management and profits.

Principal-Agent Problem

A dilemma in economics occurring when one party (the agent) is able to make decisions and/or take actions on behalf of, or that impact, another party (the principal).

Profit-Sharing Plans

A company program that gives employees a share in the profits of the company.