Dan Heath is the majority owner of Plain Truth Advertising.He hires Shirley Downs as the chief executive officer (CEO).In terms of an economic model,Mr.Heath is the ______ and Ms.Downs is the ______.
A)agent; principal.
B)principal; agent.
C)principal; intermediary.
D)agent; intermediary.

Question

Quizplus · Accepted Answer

Mr. Heath is the principal as he is the majority owner of the company and Ms. Downs is the agent as she is hired to perform duties and make decisions on behalf of the company. This situation represents the principal-agent relationship in the economic model.

Dan Heath Is the Majority Owner of Plain Truth Advertising