Equity Theory Predicts That People Are Most Satisfied in Their

question 16

Multiple Choice

Equity theory predicts that people are most satisfied in their relationships when the

• A) perceived rewards of the relationship are equal to the perceived costs of the relationship.
• B) perceived rewards of the relationship outweigh the perceived costs of the relationship.
• C) rewards and costs one partner experiences are roughly equal to those of the other partner.
• D) actual rewards and costs of the relationship exceed the expected rewards and costs of the relationship.

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Definitions:

Remeasured

The process of adjusting the book value of a foreign subsidiary’s financial statements to reflect current exchange rates or the fair value of assets and liabilities.

Straight-Line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Functional Currency

The currency of the primary economic environment in which an entity operates, typically the currency in which it principally generates and expends cash.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash, as a portion of the corporation’s earnings.