Question: (a) What is the 'Principal-Agent problem' and how does it occur? (b) Assume we have a shareholder who hires a manager to run his or

(a) What is the 'Principal-Agent problem' and how does it occur?

(b) Assume we have a shareholder who hires a manager to run his or her business. Explain how this is an example of the Principal-Agent problem

(c) Provide two possible solutions to overcome this particular problem

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