Moral Hazard Arises When Principals Find It Costly to Monitor

question 15

True/False

Moral hazard arises when principals find it costly to monitor agents.

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Definitions:

Mild Aggression

Low-intensity behaviors intended to assert dominance or express displeasure, without the intent to cause serious harm.

Power Assertion

A discipline strategy that involves the use of authority, threats, or physical force to enforce parental control or correct a child's behavior.

Induction

One method parents use to enforce control of children’s behavior. Involves use of explanation, giving reasons for rules and appealing to children’s desires to be grown-up. The most effective way to promote the internalization of rules.

Spanking

A form of physical punishment involving hitting the buttocks with the hand or an object as a disciplinary measure.