[Solved] Explanation: The monitoring problem arises when employees' goals do not match the goals of owners of a firm. Since managers can influence the level of their pay, a monitoring problem can result in firms giving exorbitant pay to managers. Difficulty: 2 Medium Topic: Incentives and Monitoring Costs Learning Objective: 16-02 Discuss why competition should be seen as a process, not a state. Bloom's: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation -The fact that U.S. managers' salaries are substantially higher than the salaries of comparable managers in Japan may be related to the fact that: A) the demand for CEOs has decreased. B) the supply of CEOs has decreased. C) there are no government controls on CEOs' earnings in the United States. D) there are more natural monopolies in the United States. Ice-Cream: A sweet, frozen dessert made from cream or milk and sugar, often flavored with fruits, chocolate, or nuts. Toys: Objects designed for play, often used to stimulate learning and psychological development in children. Psychosexual Stage: A Freudian concept involving a series of stages of childhood development, each marked by erotic attachment to a different body area. Freudian Theory: A psychological framework developed by Sigmund Freud that emphasizes unconscious processes and childhood experiences in shaping behavior.