Enoch Is Applying for a Personal Loan

question 60

Multiple Choice

Enoch is applying for a personal loan. He tells the loan officer that it is to do home improvements. However, Enoch plans on taking a vacation with the money. This is an example of:

• A) the principal problem.
• B) the agent problem.
• C) asymmetric information.
• D) skin-in-the-game.

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Definitions:

Laissez-faire Style

A leadership or management style characterized by minimal direct supervision, allowing employees significant autonomy in their day-to-day operations.

Task

A specific assignment or piece of work to be done, usually as part of broader duties or projects.

Group Decisions

Decisions made collectively by a group of individuals rather than an isolated individual, often through a process of discussion and consensus.

Laissez-faire Leader

a leadership style characterized by minimal supervision, where subordinates are given the freedom to make decisions and solve problems on their own.