Separation of ownership from control clearly expands the potential for principal/agent conflict. Why don't large corporations fail in large numbers because of this conflict?
What will be an ideal response?
The organizational architecture can realign managerial incentives through the reward system. The board of directors can exercise control over the decisions made by the CEO and higher level executives so as to carry out their fiduciary responsibilities to shareholders. External monitors such as public accounting firms, stock market analysts, and regulatory authorities serve as watchdogs of firm performance. Finally, markets can provide a discipline to managerial decision making: the market for corporate control may initiate a takeover of a management that is not performing well and poor-performing executives may not be valued highly in the managerial labor market, and inefficient firms are more likely to fail in competitive product markets.
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Which of the following statements is TRUE about the difference between the public debt and the government budget deficit?
A) The public debt is a flow measure and the government budget deficit is not a flow measure. B) There is no relationship between the public debt and the government budget deficit since one is a stock measure and the other is a flow measure. C) The public debt always increases while the government budget deficit may increase or decrease. D) The public debt for this year will increase or decrease depending upon whether there is a government budget deficit or a government budget surplus.
Between 1981 and 2013, deaths from cancer have increased in the United States
Indicate whether the statement is true or false
If the supply of labor to a firm is perfectly elastic at the going wage rate established by the forces of supply and demand then
A) the firm is price taker. B) the firm can only hire additional units of labor by driving the wage rate up. C) the wage rate has been decreasing. D) full employment exists in the labor market.
Long-run elasticity of supply is defined as
a. percentage change in quantity demanded in the long run divided by percentage change in price. b. percentage change in price divided by percentage change in quantity demanded in the long run. c. percentage change in quantity supplied in the long run divided by percentage change in price. d. percentage change in price divided by percentage change in quantity demanded in the long run.