Which Statement BEST Summarizes the Empirical Research on Equity Theory

question 91

Multiple Choice

Which statement BEST summarizes the empirical research on equity theory?

• A)Research clearly demonstrates that if people feel underrewarded, they will increase their efforts.
• B)Empirical support is mixed; people are more likely to attempt to change their ratios if they are underrewarded than if they are overrewarded.
• C)Empirical support is mixed; people are more likely to attempt to change their ratios if they are overrewarded than if they are underrewarded.
• D)Because the premises are difficult to test, very little research has been done on equity theory.

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Definitions:

Par Value

The face value of a bond or stock, as stated by the issuing company.

Life Insurers

Companies that provide policies to individuals that pay beneficiaries upon the policyholder’s death, or provide coverage for other life-related risks.

Pension Funds

Investment pools that collect and invest funds contributed by employers and employees for retirement benefits.

Liquidity

The ease with which an asset can be converted into cash without significantly affecting its market price, crucial for market efficiency and emergency needs.