A Bank Is Seeking to Downsize by Offering Workers Incentives

question 14

Multiple Choice

A bank is seeking to downsize by offering workers incentives to retire early. What problem of adverse selection might this scheme cause?

• A) The more risk-averse workers would be more likely to retire early.
• B) The more capable workers would be more likely to retire early.
• C) Workers would look outside for better opportunities.
• D) a and b.
• E) b and c.

---

Definitions:

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives.

Managers

Individuals in an organization responsible for directing and overseeing the work of employees and ensuring that organizational goals are met.

Confidence

Confidence is the belief in one's abilities, qualities, and judgment, often leading to higher performance, resilience, and willingness to tackle challenges.

Intelligence

The ability to acquire knowledge, think abstractly, understand complex ideas, and adapt to environmental challenges.