One way to avoid the principal-agent problem would be to have:
A) the employee constantly monitor the employer's activities.
B) the employer constantly monitor the employee's efforts.
C) the employer share all management choices with employees before making decisions.
D) the employee sign a waiver of release.

Question

Quizplus · Accepted Answer

The principal-agent problem arises when there is a conflict of interest between a principal (employer) and an agent (employee). Monitoring the employee's efforts helps ensure that the employee acts in the best interest of the employer, aligning their actions with the employer's goals.

One Way to Avoid the Principal-Agent Problem Would Be to Have