Which of the following are the costs associated with slack effort and with the administrative controls to deter it?
A)Administrative costs
B)Coordination costs
C)Agency Costs
D)Overhead costs
E)Market costs

Question

Quizplus · Accepted Answer

Agency costs include both the costs associated with slack effort and the costs of implementing controls to deter such slack effort. These costs arise in the context of the principal-agent problem, where the interests of the principal (e.g., shareholders) and the agent (e.g., managers) may not align perfectly, leading to potential inefficiencies and costs to ensure alignment.

Which of the Following Are the Costs Associated with Slack