What Is the Principal-Agent Problem

question 126

Multiple Choice

What is the principal-agent problem?

• A)It is a problem caused by a person (principal)who hires an agent to act on his behalf but is unwilling to delegate authority to the agent to carry out the task in the best possible way.
• B)It is a problem caused by agents pursuing their own interests rather than the interests of the principals who hired them.
• C)It is a problem of the power system of boss and subordinate where the boss (principal)exerts influence over his subordinates (agents)using punishment or threat.
• D)It is a problem that exists when a person (principal)has more information about the task than the agent he hires to perform the task.

Understand the role and types of managed-care organizations in controlling health care costs.

Understand the characteristics and extent of populations with limited health care access.

Compare health care systems and spending between Singapore and the United States.

Identify and explain major problems in the health care system.

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Definitions:

Evidence Use

The application of information or facts presented in a court to support or refute an argument or claim in a legal case.

Restatement Test

A process or set of guidelines used to reevaluate or reinterpret legal principles or statutory laws, often to clarify or update them.

Recover Against Amina

Refers to the legal process or actions taken to obtain restitution or remedy from an individual named Amina due to a loss or injury caused.

Loan Default

Failure to meet the legal obligations or conditions of a loan agreement, such as not making payments on time.