In 1981-1983, the world economy suffered a steep recession. Naturally, the fall in industrial countries' aggregate demand had a direct negative impact on the developing countries
What other mechanism was an even more important contributor to this event? A) the immediate steep inflation that followed the recession
B) the dollar's sharp depreciation in the foreign exchange market
C) the increase in primary commodity prices, increasing terms of trade in many poor countries
D) the collapse in primary commodity prices and the immediate, large rise in the interest burden that debtors had to pay
E) the influx of defaulting credit
D
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Refer to the Article Summary. Assume that more foreign governments and hospitals begin to offer and publicize their medical services to American medical tourists and, due to the growing number of aging baby boomers, more Americans desire hip-
replacement surgery. All else equal, what will happen in the market for hip-replacement surgery as a result of these two factors? A) Demand will increase, but these two factors will not shift the supply curve. B) Demand and supply will both increase. C) Demand will increase and supply will decrease. D) Supply will increase, but these two factors will not shift the demand curve.