Question 2: Exports
One of the few 'good' things about an economic downturn is that it tends to increase the desirability of a country's exports and thus reduces the balance of payments to nations abroad in international trade. When a nation is spending at a deficit to stimulate its economy, this tends to decrease the value of that nation's currency. The cheapened value of the dollar, for example, means that the dollar is much less valuable in relation to other currencies in a flexible exchange rate system. Interest rates also tend to be lowered during a period of economic contraction, as they are now, to act as an incentive for individuals to borrow and spend more. This makes it more attractive for foreign companies to invest money in a nation, and to borrow money from the nation's central bank.
During an economic expansion, as citizens have more money, the balance of payments tends tip in the favor of imports, as wealthier workers buy more foreign...
Subprime loans are said to be among the biggest reasons for the most recent financial crisis which hit the world economy at the end of year 2008. Had the lenders considered the level of income and repaying abilities of the borrowers before lending them money, the World's financial sector would not have seen such critical circumstances. The consequences of subprime loans have not ended yet; economists and researchers in the
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