'Relative Performance Contracts with Hindsight' Are a Good Idea Because

question 54

Multiple Choice

'Relative performance contracts with hindsight' are a good idea because

• A)They focus on historical standards such as last year's results
• B)They make managers look good because "with hindsight' means that managers can adjust their targets after having seen actual outcomes
• C)They encourage a philosophy of doing what is best for the firm in the light of current circumstances
• D)They encourage competitiveness between individuals in an organization

---

Definitions:

Aggregate Income

The total amount of income earned by individuals and businesses within an economy.

Consumption Function

An economic equation that illustrates the connection between gross national income and total consumption levels.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, indicating how much households intend to consume at various income levels.

Aggregate Income

The total income earned by all individuals and organizations in an economy over a specific period of time.