Which of the Following Statements Is True in the Context

question 35

Multiple Choice

Which of the following statements is true in the context of principal-agent relationships?

• A) The agency relationship is confined to the top management and does not continue down the hierarchy within the company.
• B) Agents almost always have more information about the resources they are managing than the principal does.
• C) Information asymmetry can make it easier for principals to measure how well an agent is performing.
• D) In a principal-agent relationship, the decision making power rests entirely with the principals.
• E) The relationship between the company and the suppliers is an example of a principal-agent relationship.

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Definitions:

Context Effects

The influence of environmental factors on one's perception, interpretation, or behavior in any given situation.

Top-Down Processing

A cognitive process where perception begins with the brain applying what it knows and expects to perceive and then works downward to the finer details.

Good Continuation

A principle of Gestalt psychology that states elements tend to be grouped together if they follow in the same direction or pattern, creating a perception of continuity.

Figure-Ground Separation

The ability to distinguish an object (the figure) from its background (the ground).