One Method That Businesses Use to Overcome the Principal-Agent Problem

question 77

Multiple Choice

One method that businesses use to overcome the principal-agent problem is to:

• A) not require the board of directors to oversee management.
• B) not reward executives and managers who make poor decisions.
• C) not give stock options to management.
• D) not give employees a stake in the business.

---

Definitions:

Norepinephrine

A neurotransmitter involved in arousal and stress, also known as noradrenaline.

Dopamine

Dopamine is a neurotransmitter that plays a major role in reward, motivation, memory, attention and even regulating body movements.

Functional Connectivity

Refers to the statistical association between different brain regions, indicating how various parts of the brain communicate and function together.

Major Depressive Disorder

A mental disorder characterized by a persistent and pervasive low mood accompanied by low self-esteem and loss of interest or pleasure in normally enjoyable activities.