The Agency Problem Can Be Avoided If

question 55

Multiple Choice

The agency problem can be avoided if

• A)the firm is not subject to regulation by a government agency.
• B)the manager and owner can manipulate reported profit.
• C)the firm has positive profits.
• D)the goals of the owner and manager are aligned.

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Definitions:

Federal Outlays

Government spending or expenditures, including all amounts paid out by the federal government, typically categorized by function.

Capital Budget

A Capital Budget involves the planning and allocation of funds for long-term investments and infrastructure projects.

Two-Thirds Majority Vote

A voting requirement where at least two-thirds of the members present must agree for a proposal to pass, often used for significant decisions.

Transfer Payments

Payments made by the government to individuals for which no goods or services are provided in return, such as welfare benefits.