The Cost of Agency Problems and the Cost of Actions

question 69

Multiple Choice

The cost of agency problems and the cost of actions taken to minimize them are called

• A) Moral hazard problems
• B) Adverse selection
• C) Company creed
• D) Agency costs

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Definitions:

False Uniqueness Effect

A cognitive bias wherein individuals underestimate the extent to which their abilities, behaviors, or beliefs are shared by others.

Sociometer Theory

A theory linking level of self-esteem with level of belongingness.

Belongingness

An emotional need or desire for strong and stable relationships with different groups or communities.

Self-Esteem

An individual's overall subjective emotional evaluation of their own worth or value.