The Principal-Agent Problem Is

question 216

Multiple Choice

The principal-agent problem is

• A)often more severe for partnerships than for corporations.
• B)often less severe for partnerships than for corporations.
• C)severe for corporations but nonexistent for partnerships.
• D)most severe for sole proprietorships.

---

Definitions:

Sectoral Shifts

Changes in the economic landscape that cause resources (like labor) to move from one industry or sector to another, often due to technological changes or globalization.

Frictional Unemployment

Short-term unemployment that occurs when transitioning between jobs or entering the workforce.

Unemployment Insurance

Unemployment insurance is a government program that provides temporary financial assistance to workers who have lost their jobs through no fault of their own.

Structural Unemployment

Joblessness arising from the restructuring of industries, usually caused by advancements in technology, instead of variations in market supply or demand.