Milton Friedman's View on Executive Compensation Is

question 85

Multiple Choice

Milton Friedman's view on executive compensation is:

• A) That government should control it.
• B) That there should be established ranges.
• C) That shareholders should undertake controls if they deem it necessary.
• D) None of the above

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Definitions:

Efficiency Wages

Wages that are deliberately set above the market equilibrium level by employers to increase productivity and efficiency among employees.

Below-equilibrium

A situation where the quantity demanded exceeds the quantity supplied at a given price.

Principal-agent Problem

A dilemma in which one party (the agent) is expected to act in the best interest of another party (the principal) but may have the incentive to act in their own interest instead.

Shirking

The behavior of avoiding or evading work responsibilities, often in employment settings.