The Only Two Ways of Dealing with the Principal Agent

question 248

True/False

The only two ways of dealing with the principal agent problem are the use of long-term contracts and monitoring.

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Definitions:

Monetary Damages

Compensation awarded to a plaintiff in a lawsuit as a monetary payment for losses or injuries incurred.

Legal Remedies

Solutions provided by a court of law, typically involving compensation or specific performance as a resolution to a legal dispute.

Equities

Financial assets representing ownership in a corporation, such as stocks, or a means to assess fairness or justice within the context of legal proceedings.

Compensatory Damages

Monetary awards given to a plaintiff to compensate for losses or injuries suffered as a result of the defendant's actions.