3848EconomicsMedium
Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship?
AThey pay employees with delayed compensation such as a year-end bonus
BThey buy life insurance on their workers
CThey put hidden video cameras in the workplace
DThey pay above equilibrium wages
Correct answer
B. They buy life insurance on their workers
Explanation
The correct answer is They buy life insurance on their workers.