Assume that the interest rate on borrowings in india is 1 percent while the interest rate on bank deposits in a u. s. bank is 6 percent. john, an active currency trader, borrows in japanese yen, converts the money into u. s. dollars and deposits it in a u. s. bank. the speculative element of john's carry trade is that its success is based upon his belief that

The prebisch–singer hypothesis concludes that: a. technology lowers the cost of manufactured products, so developing countries should see an increase in their terms of trade. b. developing countries experience a long-run decline in their terms of trade, as the demand for primary products in higher-income countries declines relative to their demand for manufactured goods. c. because of unfair trading practices, labor in developing countries is exploited. d. opec has been responsible for a slowdown in the world's standard of living.

Atrough in the business cycle occurs when

China's new 5 percent tax on disposable wooden chopsticks, reflecting concerns about deforestation, has been praised by environmentalists. the move is hitting hard at the japanese, who consume 25 billion set of wooden chopsticks annually. almost all of the chopsticks used in japan come from china. the reuirements for chinese manufacturers of wooden chopsticks to pay the 5 percent tax is a factor in their external environment.