The Principal-Agent Problem

question 122

Multiple Choice

The principal-agent problem

• A) occurs when managers have more incentive to maximize profits than the stockholders-owners do.
• B) would not arise if the owners of the firm had complete information about the activities of the managers.
• C) in financial markets helps to explain why equity is a relatively important source of finance for American businesses.
• D) all of the above.
• E) only A and B of the above.

---

Definitions:

Television Culture

The influences and impacts of television as a medium on society's values, norms, and daily practices, inclusive of the content and its consumption customs.

Mean World Syndrome

Mean World Syndrome is a phenomenon where excessive exposure to violent media content leads people to perceive the world as more dangerous than it actually is.

Heavy Viewers

Heavy viewers are individuals who spend a significantly larger amount of time watching television or consuming media content compared to the average person.

Mediatization

The process by which society becomes increasingly influenced by the media and its various forms, leading to changes in culture, politics, and social interactions.