The Informativeness Principle Tells Us That

question 13

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)one must use as much information as possible to develop compensation contracts,even if the cost of obtaining the information is unreasonable.
• C)one must only use information that is necessary 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:

Territorial Governments

Administrative bodies established to govern territories that are not yet fully incorporated as states within a federal structure, such as the U.S.

Western Territories

Western Territories refers to the lands west of the Mississippi River that were acquired or explored by the United States during its westward expansion in the 19th century.

Mississippi River

A major North American river, one of the longest in the world, flowing south from northern Minnesota to the Gulf of Mexico, historically significant for transport and trade.

Boundary Concessions

Agreements in which one country gives up certain territorial claims or adjusts its border as part of a negotiation with another country.