The Temptation of Imperfectly-Monitored Workers to Shirk Their Responsibilities Is

question 222

Multiple Choice

The temptation of imperfectly-monitored workers to shirk their responsibilities is

• A)an example of the moral hazard problem.
• B)an example of the adverse selection problem.
• C)an example of screening.
• D)an example of signaling.

---

Definitions:

World Bank

An international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.

International Monetary Fund

An international organization created to promote global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.

World Trade Organization

An international organization established in 1995 to regulate international trade, aiming to ensure that trade flows as smoothly, predictably, and freely as possible.

Modernization Theory

A theory that argues that societies progress linearly from traditional to modern states and that economic development brings about positive social and cultural changes.