Which of the Following Is True About Outcome-Oriented Principal-Agent Contracts

question 17

Multiple Choice

Which of the following is true about outcome-oriented principal-agent contracts?

• A)The principal must monitor with little cost what the agent has done.
• B)When profits drop, agent's compensation goes up.
• C)Agents do not demand compensating wage differentials in such contracts.
• D)Agents face minimal risks in such contracts.
• E)The interests of the company and employees are aligned in such contracts.

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