What Is the Major Disadvantage of the Performance Measurement System

question 49

Multiple Choice

What is the major disadvantage of the performance measurement system?

• A)It may be manipulated to allow continuation of the actions that best fulfill his/her reading of the system goals.
• B)A person might cheat on the measurement system by exploiting its weaknesses in hopes of advancement.
• C)It "takes underground" constructive dialogue about system goals or modifications in system measurements.
• D)A person acts in a way that optimizes his/her performance measurements without realizing that this outcome was not what the system intended.

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Definitions:

Multiplier

An economic factor that quantifies the additional economic activity generated from an initial injection of spending.

Equilibrium Real GDP

is the level of Gross Domestic Product where aggregate demand equals aggregate supply, resulting in a stable economy without inflationary or recessionary gaps.

Investment

The act of allocating resources, usually financial, with the expectation of generating an income or profit, such as purchasing stocks, bonds, or real estate.

Inflationary GDP Gap

A situation where actual gross domestic product exceeds the potential GDP, leading to upward pressure on prices and inflation.