Question

Which statement best describes incentives?

Incentives are mostly positive.
Incentives are mostly negative.
Incentives can be positive or negative.
Incentives are neither positive nor negative.

Answer 1

Incentives can be positive or negative.

Explanation: Incentives are factors that motivate behavior — positive incentives (rewards, bonuses, subsidies) encourage actions, while negative incentives (penalties, fines, punishments) discourage actions. They may also be intrinsic (personal satisfaction) or extrinsic (money, grades).