The Principal-Agent Problem Exists When

question 68

Multiple Choice

The principal-agent problem exists when

• A)there is no command system in place.
• B)firms operate as sole proprietorships.
• C)agents do not act in the best interest of principals.
• D)principals do not act in the best interest of agents.
• E)the future value of money is more than its current value.

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Definitions:

Contracts

Legally binding agreements between two or more parties that specify the terms and conditions under which certain actions or transactions will be carried out.

Secondary Labor Market

Employment sector characterized by low wages, job insecurity, and poor working conditions, often involving temporary or part-time jobs.

Primary Labor Market

Job sectors characterized by high wages, job security, benefits, and opportunities for advancement, often requiring higher education or specialized skills.

Overworked

A state where an individual is subjected to excessive work demands, often leading to stress and a diminished work-life balance.