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An example of moral hazard is when a manager shirks. There are several ways to control moral hazard, which option is an owner most likely

  • An example of moral hazard is when a manager shirks. There are several ways to control moral hazard, which option is an owner most likely NOT choose?

Direct Monitoring

Hire the manager and put up with the shirking

Rent the firm to the manager

Give the a share of the payoff

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