The Recent Enron and Tyco Scandals Are an Example of

question 46

Multiple Choice

The recent Enron and Tyco scandals are an example of

• A) the free-rider problem.
• B) the adverse selection problem.
• C) the principal-agent problem.
• D) the "lemons problem."

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Definitions:

Fiscal Year

It is the annual period used for accounting purposes by an organization, differing from the calendar year, and is primarily adopted for tax, financial reporting, and budgeting.

Governmental Assistance

Financial support or aid provided by the government to individuals, businesses, or other governmental entities.

Automatic Stabilization Policies

Economic policies and programs that automatically adjust government spending or taxes in response to economic changes, without the need for additional legislative action.

Aggregate Demand

The combined need for all commodities and services in an economy, quantified at a set price level and within a specific period.