International economics ________ use the same fundamental methods ...

[kaid0807]

International economics ________ use the same fundamental methods of analysis as other branches of economics, because ________.
 
  A) does not, the level of complexity of international issues is unique
  B) does not, the interactions associated with international economic relations is highly mathematical
  C) does not, international economics takes a different perspective on economic issues
  D) does not, international economic policy requires cooperation with other countries
  E) does, the motives and behavior of individuals are the same in international
  trade as they are in domestic transactions

Question 2

What three critical factors or preconditions turned a national, U.S. problem into a global financial crisis in 2007. Be sure to address the role securitization played and how it affected regulators.
 
  What will be an ideal response?

[pallen55]

Answer to Question 1

E

Answer to Question 2

The three critical factors were the evolution of new and innovative financial products, the integration of financial markets globally combined with the high rates of savings that were coming out of markets that had not participated significantly in the past., and deregulation. New and innovative financial products evolved including securitization, where large numbers of loans are grouped together and shares of the package are sold to virtually anyone, anywhere. These crossed borders easily and the purchasers lose money if the loans cannot be repaid, but it was often difficult to accurately access risk and for regulators to understand and to keep up with the innovations. In general, there was a failure in regulation as the tremendous amount of innovation of instruments and integration of markets evolved. Close regulation was generally not perceived to be in the national interest as it would reduce innovation and efficiency.

[kaid0807]

Gracias!

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