The Informativeness Principle Tells Us That

question 12

Multiple Choice

The informativeness principle tells us that:

• A) information is overrated because employees can always lie about their performance, and detecting is costly and counter productive.
• B) you must use as much information as possible to develop compensation contracts, evenif the cost of obtaining the information is unreasonable.
• C) you must use just sufficient information as possible to develop compensation contracts, as long as the cost of obtaining the information is reasonable.
• D) you must use as much information as possible to develop compensation contracts, as long as the cost of obtaining the information is reasonable.

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Definitions:

Oceans

Large bodies of saltwater that cover approximately 71% of the Earth's surface, playing a critical role in climate regulation and supporting diverse marine life.

Thermohaline Conveyor

A mostly deep-water ocean current driven by density differences that are caused by variations in temperature and salinity.

Saline Water

Water that contains a significant amount of dissolved salts, typically found in oceans and saltwater lakes.

Cold Currents

Ocean currents that move cold water from polar or temperate regions towards the equator, influencing regional climates and marine ecosystems.