In the Case of a Moral-Hazard Problem,which of the Following

question 309

Multiple Choice

In the case of a moral-hazard problem,which of the following is not a way for the principal to encourage the agent to act more responsibly?

• A) the principal could better monitor the agent
• B) the principal could pay the agent above-equilibrium wages
• C) the principal could delay payment to the agent
• D) the principal could pay the agent below-equilibrium wages

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Definitions:

Robert E. Lee's Army

The principal military force of the Confederate States of America under the command of General Robert E. Lee during the American Civil War.

Confederates

Individuals or entities aligned with or supportive of the Confederate States of America, a group of southern states that seceded from the United States leading to the American Civil War from 1861 to 1865.

Execution

Execution refers to the carrying out of a sentence of death on a person convicted of a capital crime, or it can also mean the act of performing a plan, order, or directive.