Which of the Following Correctly Describes Moral Hazard-Type Behaviour by Managers

question 38

Multiple Choice

Which of the following correctly describes moral hazard-type behaviour by managers?

• A) Managers disclose complete information about their behaviour to the shareholders.
• B) Managers offer to increase sales and profits but, once hired, act in their own interests.
• C) Managers reduce the monitoring costs through good performance.
• D) Managers help in the expansion of the business and increase profits.

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Definitions:

Pay Scales

Pay scales refer to the structured system that determines the salary range for different positions or levels of responsibility within an organization.

Department Manager

A person in charge of overseeing the operations, personnel, and budget of a specific department within an organization.

Administered

Managed or executed in accordance with set rules or procedures, often used in the context of tests, policies, or medications.

Compensation Inequities

Refers to the disparities or unfair differences in pay among employees that do the same or similar work, often tied to gender, race, or other demographic factors.