Moral Hazard Is a Principal-Agent Problem That Arises When

question 21

Multiple Choice

Moral hazard is a principal-agent problem that arises when

• A)Managers' and owners' objectives are nonaligned.
• B)Complete contracts effectively restrain managers from making value-reducing decisions.
• C)Managers can take hidden actions.
• D)both a and c
• E)all of the above

---

Definitions:

Voice opportunities

Ways in which employees can express opinions, feedback, or concerns within an organization to influence decision-making processes.

Ireland

A country located in the north-west of Europe, known for its rich culture, history, and as a member of the European Union.

Sector bargaining

A negotiation process wherein labor unions and employers negotiate wages and working conditions for all workers in an entire sector, rather than individual workplaces or companies.

Regional level

A scope or scale of analysis or operation that focuses on a specific geographic area, often to consider local conditions or policies.