Answer to Question 1
The effects of closer global linkages on the economics of countries have been dramatic. Policymakers have increasingly come to recognize that it is very difficult to isolate domestic economic activity from international market events. Constant rapid technological change and vast advances in communication permit firms and countries to quickly emulate innovation and counteract carefully designed plans. As a result, governments are often powerless to implement effective policy measures even when they know what to do. Policymakers therefore find themselves with increasing responsibilities yet with fewer and less effective tools to carry out these responsibilities. At the same time that more parts of a domestic economy are vulnerable to international shifts and changes, these parts are becoming less controllable. The global market imposes increasingly tight limits on national economic regulation and sovereignty.
Answer to Question 2
D
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