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Financial Action Task Force (FATF)

In the context of public administration, the principal–agent problem is most directly caused by which of the following?

MCQ

MCQ Answer

A. Excessive political interference
B. Information asymmetry between principals and agents Correct

Explanation

The principal–agent problem arises when agents possess more information than principals and have different incentives, leading to shirking or divergent actions.

C. Insufficient financial resources
D. Lack of legal frameworks

Correct Answer

Information asymmetry between principals and agents

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