________ describes contexts in which an employee prefers to exert less effort than the effort that the owner wants because the employee's effort cannot be accurately monitored and enforced.
A)Management compensation
B)Moral hazard
C)Goal congruence
D)Incentive compensation

Question

Quizplus · Accepted Answer

Moral hazard refers to situations where one party's behavior is not fully observable or enforceable by the other party, leading to the risk of the unobservable party shirking or exerting less effort. In the context given, if the employee's effort cannot be accurately monitored and enforced by the owner, the employee may be more likely to engage in shirking behavior. The other choices do not directly relate to this situation.

________ Describes Contexts in Which an Employee Prefers to Exert