The Principal-Agent Problem Arises

question 20

Multiple Choice

The Principal-Agent Problem arises:

• A)because managers have little incentive to work in the interest of shareholders when this means working against their own self-interest.
• B)because of the separation of ownership and control in a corporation.
• C)Both A and B
• D)None of the above

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Definitions:

Durkheim

A founding figure in sociology, notable for his analysis of society's structural and functional aspects, including concepts like social solidarity and anomie.

Crucifix

A crucifix is a Christian symbol consisting of a cross with an image of Jesus Christ's body hung upon it, representing the sacrifice of Jesus’ crucifixion in the New Testament.

Durkheim

A French sociologist, Emile Durkheim, who is considered one of the founding fathers of sociology, emphasized the importance of social institutions and structures in influencing human behavior and social solidarity.

Totem

A natural object, animal, or phenomenon regarded as a symbol representing clans, tribes, or families, carrying spiritual or cultural significance.