The function of the agent in a principal-agent relationship is to ________.
A) ensure an efficient allocation of public goods and services in an economy
B) perform tasks for the principal
C) implement plans to mitigate the problem of moral hazard
D) provide appropriate incentives to the principal

Question

Quizplus · Accepted Answer

The function of the agent in a principal-agent relationship is to act on behalf of the principal and perform tasks that the principal has delegated to them. The agent must carry out these tasks in the best interest of the principal and ensure that their actions align with the principal's goals and objectives. Other options such as ensuring an efficient allocation of public goods and services, implementing plans to mitigate the problem of moral hazard, and providing appropriate incentives to the principal may be important considerations in a principal-agent relationship, but they are not the primary function of the agent.

The Function of the Agent in a Principal-Agent Relationship Is