For this extra credit assignment, you are tasked with exploring the causes and consequences of the global financial crisis of 2008 within the context of a market-centered economy model. Your responses to the questions should provide a detailed analysis and demonstrate your understanding of how regulatory failures, risky financial practices, and the global interconnectedness of markets contributed to the crisis.

Question 1 (Minimum 100 words): In a market-centered economy, the causes of the global financial crisis of 2008 can be linked to several market forces and behaviors. Notably, risky financial practices, such as subprime lending and the securitization of subprime mortgages, were driven by profit-seeking motives. How did these practices contribute to the crisis within the context of a market-centered economy?

Question 2 (Minimum 100 words): The regulatory framework in a market-centered economy is designed to maintain the stability and integrity of financial markets. However, during the lead-up to the financial crisis, regulatory oversight proved insufficient. Regulatory agencies failed to adequately monitor and constrain the risky behaviors within the financial industry. What were the specific regulatory failures, and how did they allow for excessive risk-taking and leverage?