What Is the Most Common Way That Agency Problems Are

question 79

Multiple Choice

What is the most common way that agency problems are addressed in most corporations?

• A)by using disinterested outside bodies to adjudicate between managers and shareholders when such conflicts arise
• B)by minimising the number of decisions that a manager makes where there is a conflict between the manager's interests and those of the shareholders
• C)by terminating the employment of employees who are found to have put their own interests above that of the company's
• D)by prosecuting managers who have been found to have illegally used company monies for their own benefit

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Definitions:

External Benefits

Positive effects of a product or service on individuals or entities who are not directly involved in the transaction or production of the product or service.

External Benefit

A positive effect or advantage that results from a product or service's use, affecting individuals or entities who are not directly involved in the transaction.

Positive Externality

A beneficial effect experienced by a third party or the society as a whole, resulting from an economic transaction.

Market

The environment in which buyers and sellers interact to exchange goods, services, and information, setting prices through supply and demand.