Which of the Following Conditions Must Hold in Order to Have

question 42

Multiple Choice

Which of the following conditions must hold in order to have a principal-agent problem?

• A)Managers and owners have different objectives for the firm.
• B)It is very costly to oversee every managerial decision to make sure all decisions increase the value of the firm.
• C)Complete contracts effectively restrain managers from making value-reducing decisions.
• D)The objectives of managers and owners are aligned but hidden actions by managers cannot be observed no matter how much is spent on monitoring managers.
• E)both a and b

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Definitions:

Reticular Activating System

A network of nerves in the brainstem that plays a key role in controlling arousal and the transition between sleep and wakefulness.

Sleep Deprivation

A condition resulting from insufficient sleep, which can impact mental, emotional, and physical health.

Usual Sleep Patterns

The typical sequence and timing of sleep stages and awake periods experienced by an individual over a 24-hour period.

Determinant

A factor or element that contributes to a particular outcome or condition.