If High-Level Executives of a Company Award Themselves Sizable Bonuses

question 193

Multiple Choice

If high-level executives of a company award themselves sizable bonuses even though the firm they manage is making losses and performing poorly, this event is most likely to arise because of

• A) the law of diminishing marginal returns.
• B) competition among business firms for high-level executives.
• C) economies of scale.
• D) the principal-agent problem.

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Definitions:

Posttraumatic Growth

Beneficial transformation resulting from encountering and battling through a significant life challenge or traumatic incident.

Traumatizing

Causing severe emotional distress or psychological damage.

Stronger Person

Refers to an individual possessing greater physical strength, emotional resilience, or moral integrity compared to others.

Posttraumatic Growth

The advantageous transformation in psychology stemming from battling tough life challenges.