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:

Foreign Aid

Financial or material assistance provided by one country to another, often for developmental purposes.

Private Channels

Means of communication or distribution that are owned and operated by non-governmental entities.

International Monetary Fund

An international organization created for the purpose of fostering global monetary cooperation, securing financial stability, facilitating international trade, promoting high employment, and sustainable economic growth, and reducing poverty.

Food for Peace

A U.S. government program designed to combat world hunger and malnutrition through the donation of U.S. agricultural products to foreign countries.