Question: Please answer the question with specific explanation and evidence... Q: The principal-agent problem may lead to higher or lower spending than is desirable from the

Please answer the question with specific explanation and evidence...

Q: The principal-agent problem may lead to higher or lower spending than is desirable from the standpoint of economic efficiency depending on whether health care is provided on a fee-for-service basis or through a prepaid arrangement such as a Health Maintenance Organization (HM0).Explain this statement.

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