Question: Differentiate a normative theory from a positive theory. Provide an example of each. One of the ways to reduce agency costs is to align an

Differentiate a normative theory from a positive theory. Provide an example of each. One of the ways to reduce agency costs is to align an agent's interest with a principal's interest, because the agency problem arises due to divergent interests. Do you support this statement? Why? [ 15 marks]

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