Which of the following will control incentive problems in a corporation?
A. Managers and employees adopting higher and stringent ethical standards
B. Managers and employees adopting predefined ethical standards
C. Managers forcing employees to adopt higher and stringent ethical standards
D. Managers checking on their employees email and other activities closely
Answer: A
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A) The President of the United States regulates B) Commercial banks regulate C) The Federal Reserve System regulates D) The Department of Treasury regulates E) The State Department regulates
In the model of public goods, when the government chooses public goods provision optimally
A) there is no public goods production. B) public goods are provided in an amount equal to private goods. C) the marginal rate of substitution of private goods for public goods equals the marginal rate of transformation. D) GDP is maximized.