In Corporations, a Principal-Agent Problem Can Arise When

question 376

Multiple Choice

In corporations, a principal-agent problem can arise when

• A)the shareholders are the principal and the managers are the agent.
• B)the board of directors is the principal and the managers are the agent.
• C)the shareholders are the principal and the board of directors is the agent.
• D)All of the above are correct.

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Definitions:

Sensorimotor Intelligence

Piaget’s term for the way infants think—by using their senses and motor skills—during the first period of cognitive development.

Circular Reactions

Repetitive actions typical in infant development, which serve to build cognitive and motor skills.

Muscle Strength

The ability of a muscle or group of muscles to exert force against resistance.

Toddlers

Young children, typically between the ages of one and three years, who are in the early stages of walking and developing language skills.