________ describes contexts in which an employee prefers to exert less effort than the effort that the owner wants because the employee's effort cannot be accurately monitored and enforced.
A)Goal congruence
B)Moral hazard
C)Management compensation
D)Incentive compensation

Question

Quizplus · Accepted Answer

Moral hazard refers to situations where one party has an incentive to take risks because they do not bear the full consequences of their actions. In an employment context, an employee may not work as hard as the owner wants because they know it is difficult to accurately monitor and enforce their effort, leading to moral hazard. The other options are not directly related to this concept.

________ Describes Contexts in Which an Employee Prefers to Exert