To reduce moral hazard,a firm may
A)pay workers at a piece rate.
B)offer a year-end bonus if firm profits are up.
C)offer stock options.
D)All of the above.

Question

Quizplus · Accepted Answer

All of the options (paying workers at a piece rate, offering a year-end bonus if firm profits are up, and offering stock options) are strategies to align the interests of the employees with the goals of the firm, thereby reducing moral hazard.

To Reduce Moral Hazard,a Firm May