Spot checks are typically a solution to the:
A) manager-consumer, principal-agent problem.
B) manager-worker, principal-agent problem.
C) consumer-worker, principal-agent problem.
D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

Spot checks are a solution to the manager-worker, principal-agent problem. This is because spot checks are a form of monitoring that a principal (such as a manager or employer) can use to ensure that their agents (such as workers or employees) are performing their duties properly and not engaging in shirking or misconduct. By randomly checking on them, the manager can reduce the likelihood of the worker hiding or disguising their behavior.

Spot Checks Are Typically a Solution to The