Which of the Following Practices Would Indicate That an Employer

question 198

Multiple Choice

Which of the following practices would indicate that an employer is trying to overcome a moral-hazard problem with his employees?

• A) The employer pays his workers wages that are unusually high for the industry and region.
• B) The employer has voluntarily removed video cameras from the factory floor.
• C) The employer has discontinued the practice of giving his employees' year-end bonuses.
• D) Both A and B are correct.

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Definitions:

General Agreement on Tariffs and Trade

An international treaty aimed at reducing trade barriers and promoting global economic trade.

Trade Between Countries

The exchange of goods, services, and capital among various countries, driven by international agreements and economic policies.

Stare Decisis

A legal doctrine stating that courts should follow precedents established by previous decisions when the same points arise again in litigation.

Legal System

The framework of rules, institutions, and practices that control the way in which a society regulates individual and collective conduct.