Arnold Sells Oil Field Equipment

question 5

Multiple Choice

Arnold sells oil field equipment.He is paid 2 percent of the dollar amount of the sales he has completed each quarter.This is Arnold's only compensation,but he sells several million dollars' worth of equipment each year.He is on the ____ system.

• A) retainer
• B) pay-as-you-go
• C) deferred compensation
• D) straight commission

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Definitions:

Precautionary Motive

A rationale for holding money or liquid assets to guard against future uncertainties and potential emergencies.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.