Q
Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ?
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A
A. They pay employees with delayed compensation such as a year-end bonus
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B
B. They buy life insurance on their workers
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C
C. They pay above equilibrium wages
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D
D. They put hidden video cameras in the workplace
Correct Answer:
B. B. They buy life insurance on their workers
