In effect foreign policy involves actors within and outside of state boundaries; organized as different groups with both contradicting and overlapping interests, interacting through differing networks. In essence, the substance of foreign policy is determined by both domestic and international issues, and involves processes of negotiation, bargaining, conflict and compromise. Often, this dual nature of foreign policy issues creates tensions for the actors engaged in the foreign policy decision-making processes, as it generates both domestic and international effects of the said issues. Actors engaging in foreign policy, often, have to manage the tensions that are creating a compressing effect on their priorities forcing them to play a two-level game.

As can be understood from the information given foreign policy involves all processes which take place in the options, so the correct answer is E.