Economics 9708 · AS & A Level · 7.8

7.8 — practice question

What is most likely to make the principal–agent problem worse?

  • Aensuring the actions of agents are known by the managers
  • Blinking the rewards of managers with the profitability of the firm
  • Cremoving from managers the opportunity to hold shares
  • Dpreparing contracts that compel agents to work in the interest of the principal

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