Which of the following describes a situation in which an employee prefers to exert less effort than the effort the owner desires because the employee's effort cannot be accurately monitored and enforced?
A) Goal incongruence
B) Moral hazard
C) Performance report variance
D) Incentive report variance

Question

Quizplus · Accepted Answer

This scenario is an example of moral hazard, where the employee has an incentive to shirk because their effort cannot be accurately monitored and enforced by the owner. Moral hazard exists when one party takes risks knowing that the potential costs or burdens of taking such risks will be borne by others.

Which of the Following Describes a Situation in Which an Employee