As it relates to corporations, the principal-agent problem is that:
A. the goals of the corporate managers (the principals) may not match the goals of the
corporate owners (the agents).
B. the goals of the corporate managers (the agents) may not match the goals of the corporate
owners (the principals).
C. the federal government (the agent) taxes both corporate profits and the dividends paid to
stockholders (the principals).
D. it is costly for the corporate owners (the principals) to obtain a corporate charter from
government (the agent).
Answer: B
You might also like to view...
What happens when the Federal Reserve purchases U.S. government bonds?
A) Interest rates rise because bonds become scarcer. B) Commercial bank reserves increase. C) The national debt declines in size. D) The growth rate of the money stock falls. E) All of the above occur.
The demand curve faced by a perfectly competitive firm is:
a. downward sloping. b. the same as the market demand curve. c. horizontal. d. perfectly inelastic.
A ___________is a government payment to an individual, business, or other group to encourage or protect a certain type of economic activity.
Fill in the blank(s) with the appropriate word(s).
If a monopolist knows its price elasticity of demand is greater than one, then a(n) _____ in price will _____ total revenue.
a. decrease; increase b. increase; not change c. increase; increase d. decrease; decrease