If the Agent Has More Information Than the Principal and There

question 4

Multiple Choice

If the agent has more information than the principal and there is only one state of nature,then

• A)efficiency in both production and risk-bearing can be achieved.
• B)only efficiency in production can be achieved.
• C)only efficiency in risk-bearing can be achieved.
• D)neither efficiency in production nor efficiency in risk-bearing can be achieved.

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Definitions:

Influence

The capacity to affect the character, development, or behavior of someone or something, or the effect itself.

Attrition

The process of reducing the workforce through voluntary or involuntary departures, not including layoffs due to external factors.

Signs Persuasion

A technique or process of influencing individuals' attitudes, beliefs, or behaviors through the use of symbols, words, or signals.

Symbols Power

The influence and authority derived from the use or interpretation of symbols, often within a cultural, social, or organizational context.