The fact that U.S. managers' salaries are about four times higher than those of comparable managers in Japan, where banks control firms more closely, is probably:
A) an example of the monitoring problem in the United States.
B) an example of X-inefficiency in Japan.
C) due to the fact that the U.S. economy is much less competitive.
D) due to the fact that there are more natural monopolies in the United States.

Question

Quizplus · Accepted Answer

U.S. managers' higher salaries compared to Japan's can be seen as a monitoring problem, where less oversight by banks or stakeholders allows for higher compensation.

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