A. Define the Principle-Agent problem in the context of corporate governance. Also define Limited Liability.

B. Every year since 2009 the federal government has issued more than a trillion dollars in new bonds (to cover the deficit spending). What effect would this have if the bond market reflects ordinary demand and supply curves (price of bonds, quantity of bonds, and impact on interest rates). What would explain the fact that interest rates have actually declined or remained very low for this period of time?