It is important for society as a whole to solve the agency problem, since the agency problem

Question

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The agency problem leads to a variety of negative effects, including the waste of scarce resources (as managers may prioritize their own interests over those of shareholders), the hampering of capital market functions (as investors may be hesitant to invest if they don't trust that managers are acting in their best interests), and the retardation of economic growth (as companies may not be operating as efficiently or effectively as they could be). Therefore, solving the agency problem is important for society as a whole to maximize resource use, encourage investment, and promote economic growth.

It Is Important for Society as a Whole to Solve