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Question
As the largest employer in a small town, Carlyle may be more likely to take business risks because, if the company struggles, he might expect the local government to provide financial assistance. This situation reflects a(n)
a. moral hazard problem that becomes an adverse selection problem.
b. principal-agent problem that becomes a moral hazard problem.
c. principal-agent problem.
d. moral hazard problem.
e. adverse selection problem.
Answer
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Related questions
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