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In business, there is a tension between the principals (stockholders) and agents (managers). The managers may choose policies that increase short-term profitability (and their bonuses)

In business, there is a tension between the principals (stockholders) and agents (managers). The managers may choose policies that increase short-term profitability (and their bonuses) at the expense of long-term profitability. Describe why the same types of problems may exist in government, where elected officials are the agents and voters are the principals. 15 mark

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