Which of the Following Can Help Solve the Moral Hazard

question 55

Multiple Choice

Which of the following can help solve the moral hazard inherit in the employer-employee relationship:
i. higher wages
ii. more monitoring
iii division of employee responsibilities:

• A) (i) and (i) anly
• B) (ii) and (ii) any
• C) (i), (ii) and (ii)
• D) (ii) any

Grasp the concept and requirements for involuntary conversions including replacement periods and the treatment of gains.

Recognize the conditions under which gains from sales or exchanges can be deferred or excluded.

Identify the criteria for the exclusion of gain on the sale of a principal residence.

Understand the basis calculation in like-kind exchanges and involuntary conversions.

---

Definitions:

Bonus

Additional compensation given to employees or stakeholders beyond the standard payment expectations.

Ownership Interest

The proportion of a company or property owned by an individual or entity, often represented as a share of equity.

Capital Balances

The amounts of money invested by owners or shareholders in a company, reflecting the net assets owned by the investors.

Profit Sharing

A company policy of distributing a portion of its profits to its employees as a form of bonus or incentive.