The Principal-Agent Problem Arises

question 20

Multiple Choice

The Principal-Agent Problem arises:

• A)because managers have little incentive to work in the interest of shareholders when this means working against their own self-interest.
• B)because of the separation of ownership and control in a corporation.
• C)Both A and B
• D)None of the above

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Definitions:

Collectivistic Cultures

Societies that prioritize the goals and well-being of the group over individual achievement and identity.

Initiative

The capacity to assess and initiate things independently, often to take charge before others do.

Creativity

The ability to produce original and valuable ideas or solutions, involving imagination and innovation.

Achievement

The successful accomplishment of a task or goal, often recognized by some form of reward or acknowledgment.