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Unformatted text preview: Basically, it means that the country should not take full responsibility of a debt incurred by the government if the government borrowed money without the knowledge and approval of the people, nor if it was in their interests. If the lenders knew what was going on, they cannot expect the people to take on the debts of the government if the loans did not benefit the interests of the people. 3. What is the agency problem in this video? In this video, the government is the agent and the public or people represent the principal. Some of the banks and Greece leaders used to loans for their own financial gains. Some of these transactions were done without the knowledge or approval of the public, nor in their interests....
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This note was uploaded on 12/11/2011 for the course BUS 189 at San Jose State University .