Performance Shares Grant Stock for Achieving Certain Performance Goals

question 2

Multiple Choice

Performance shares grant stock for achieving certain performance goals:

• A)In the following year.
• B)In two years or more.
• C)In the current period.
• D)When stock prices improve.

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Definitions:

Substitution Effect

The economic understanding that as prices rise (or incomes decrease), consumers will replace more expensive items with less costly alternatives.

Inferior Good

A type of good for which demand decreases when the income of the consumer increases, inversely related to normal goods.

Income Effect

The change in an individual's or economy's income and how that change will affect the quantity demanded of a good or service.

Substitution Effect

Refers to the change in consumption patterns due to a change in the relative prices of goods, holding the consumer's utility constant.