"Levers of Control," in Addition to a Diagnostic Control System

question 44

Multiple Choice

"Levers of control," in addition to a diagnostic control system, are needed in an organization because

• A)diagnostic controls have been found to lead to poor financial performance.
• B)diagnostic controls have no place in a Balanced Scorecard system.
• C)pressure to perform on diagnostic controls may lead to unethical behaviour.
• D)they are mandated by the external accounting agencies.
• E)they are mandated by taxation agencies.

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Definitions:

Consumption

The use of goods and services by households, constituting a major part of the economy's total output.

Permanent Income Hypothesis

A theory proposed by Milton Friedman suggesting that an individual's consumer behavior is determined by their long-term income expectations rather than their current income.

Services

Intangible products offered to consumers and other businesses, such as banking, education, and healthcare, which unlike goods, are not physical objects.

Autonomous Consumption

The level of consumption expenditure that occurs when income is zero, reflecting the basic level of consumption necessary for survival.