The following is NOT an example of a potential monitoring solution to moral hazard
A)blocking social network sites on company computers
B)termination for failing to show up to work during the probationary period
C)GPS tracking devices in repair trucks
D)listening in on call center conversations

Question

Quizplus · Accepted Answer

Termination for failing to show up to work during the probationary period is a solution for reducing agency problems due to adverse selection (selecting employees who are not committed to the job) rather than moral hazard. The other options listed (blocking social network sites, GPS tracking, and listening in on conversations) are examples of monitoring solutions to moral hazard.

The Following Is NOT an Example of a Potential Monitoring