A risk-averse manager is hired to run a firm for shareholders. If the manager's effort can be observed and specified in a contract, which would be the best employment contract?

a. a high-powered incentive contract to elicit the most effort.
b. a fixed salary paid as long as the required effort is undertaken.
c. a proportion of profits paid as long as the required effort is undertaken.
d. a wage well in excess of his or her outside opportunity.


b

Economics

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A) interest rate, planned expenditures B) interest rate, planned autonomous spending C) planned autonomous spending, planned expenditures D) planned autonomous spending, planned autonomous spending

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A) land. B) labor. C) physical capital. D) human capital.

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a. Japan b. Mexico c. Canada d. Britain e. Korea

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