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When a manager monitors the progress of an affirmative action program to advance minorities within the corporation; reviews progress on changes in employee attitudes; calls a special meeting to discuss problems; and makes appropriate adjustments in the program, the manager is performing the function of:
Adverse Selection
A situation in which one party in a transaction has more information than the other, often leading to an imbalance in a market or poor decision-making outcomes.
Moral Hazard
A situation where one party engages in risky behavior knowing that they are protected from the consequences by another party.
Adverse Selection
A situation where asymmetric information results in high-risk individuals being more likely to select into or remain in a contract designed for low-risk individuals, affecting insurance markets and other transactional relationships.
Asymmetric Information
A situation in which one party to a transaction has more or superior information compared to another.
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