Corporate Control Mechanisms

question 50

Multiple Choice

Corporate control mechanisms

• A)can make it easier to detect hidden actions by managers.
• B)will exacerbate moral hazard problems when complete contracts are effectively solving the principal-agent problem.
• C)may not be important when corporate takeovers effectively impose external forces to ensure managerial decisions are value-maximizing.
• D)make it impossible for managers to take hidden actions that are harmful to the interests of the firm's owners.
• E)both a and b

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Definitions:

Illusory Correlation

The perception of a relationship between two variables when no such relationship exists.

EMDR

Eye Movement Desensitization and Reprocessing, a psychotherapy treatment designed to alleviate the distress associated with traumatic memories.

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Deinstitutionalization

denotes the process of releasing people with mental health conditions from psychiatric hospitals and integrating them into community-based settings, aimed at improving quality of life and reducing reliance on institutional care.