The principal-agent problem is quite common in large public corporations due to:
A. the fact that the people making the operational decisions are usually not the owners.
B. too little regulation by government.
C. the fact that large companies employ many people.
D. the fact that large corporations generate large sales volumes.
Answer: A
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If a product is a normal good, an increase in your income will
A) increase demand for the product. B) decrease demand for the product. C) increase supply of the product. D) decrease supply of the product.
If E$/£ increases by 20%, this is consistent with an increase from:
a. 4 to 5. b. 4 to 6. c. 5 to 6. d. 4 to 7.
An essential function of a central bank is to:
A. collect taxes. B. control and monitor government budgets. C. manage the money supply. D. issue debt.
In a perfectly competitive market in which identical firms face the same horizontal marginal cost curve, if demand increases, then the amount of consumer surplus will
A) increase. B) decrease. C) become negative. D) not change.