What Is the Dark Side of Principal-Agent Relationships

question 99

Multiple Choice

What is the dark side of principal-agent relationships?

• A)Agents are often not rational.
• B)Institutions sometimes force principal-agent relationships underground.
• C)Principals often force agents to do things against their will.
• D)The interests of the agent and the principal may not be well aligned.
• E)The principals usually do not know what they are doing.

Recognize the factors that influence long-run aggregate supply and demand, including technological changes and resource availability.

Understand the concept of potential output and how it is affected by economic factors.

Interpret the effects of beneficial and adverse supply shocks on the economy.

Evaluate the impact of changes in capital stock on an economy's production capacity.

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Definitions:

Extraction

The process of removing raw materials from the earth, which are then used in the production of goods and services.

Profit Per Pound

The amount of profit generated for each pound of product sold, used in evaluating the efficiency of production and sales.

Coal Reserve

Accumulations of coal resources that have been discovered, confirmed by geological surveys, and are considered economically extractable using current technology.

Renewable Resource

A natural resource that can replenish itself over time through natural processes or through human intervention.