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Optimal Employment Contracts for Managers,given Revenue Risk and Unobservable Output,consist

Question 8

Multiple Choice

Optimal employment contracts for managers,given revenue risk and unobservable output,consist of:


A) a flat salary alone.
B) a flat salary plus some return to estimates of effort.
C) only a profit share.
D) a flat salary plus a profit share related only indirectly to individual effort.
E) a flat salary plus a profit share that is equal to the share accruing to owners.

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