One of the Characteristics of a Principal-Agent Relationship Is

question 26

Multiple Choice

One of the characteristics of a principal-agent relationship is:

• A)The owners of the company are involved in the daily management of the company.
• B)The owners of the company hire an agent to run the company for them and to make daily decisions for the company.
• C)The owners have more knowledge than management about the daily operations of the company.
• D)Outsiders benefit when a manager is hired by owners to protect their interests in the company because the information available to outsiders is more likely to correspond to financial accounting standards.

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Definitions:

Prices Rising

An economic scenario where the general level of prices for goods and services is increasing over time, often referred to as inflation.

CPI

A gauge called the Consumer Price Index assesses the weighted average price shifts in a collection of consumer products and services, encompassing areas like food, healthcare, and transportation.

Economists

Professionals who study the production, distribution, and consumption of goods and services, often focusing on research, analysis, and the development of economic theories.

Quality Changes

Alterations in the features, specifications, or performance of goods and services, often impacting their perceived value or utility.