Economics and OPEC
Uploaded by spootyhead on Mar 08, 2007
Economics and OPEC
The economy is affected by many factors that determine if it is strong or weak. These factors have to do with buyers consuming goods and services and at what rate they do this. Do the goods and services that are consumed by people created wealth, jobs and a better overall economy for a country. Throughout history some economies have evolved faster and stronger than others. Policies that the government places on industry, technology and the environment can all affect the prosperity of an economy. Of the factors that affect economic growth the industry of Oil and gas is one that holds a stronghold in the world's and America's economy today.
When evaluating the economic growth factor of economy and specifically oil and gas on must consider the following questions:
¨ What relationship does the factor have with the whole economy?
¨ How does this factor affect economic growth
¨ Is the factor a cause or effect of economic growth?
¨ what would the economy be like if there were significant problems with this factor?
¨ What relation does a central bank have to this factor?
I will answer each of these questions in respect to how economy is affected by oil and gas.
The economy in the United States today is greatly affected by oil and gas. When there are large reserves and an increase of active drills in respect to oil, the economy seems to receive a boost. This is because prices for such things like gas and oil fall and people are able to consume more gas at a lower price. There is more supply and prices fall, therefore people save money on gas and can consume other items in the economy. People working in these industries have more job openings and more jobs filled, therefore creating a lower unemployment rate and a higher national per capita income. The need for substitutes are not there so, consumers will consume oil and gas at a growing rate. Since, people use oil and gas for so many different things like heating there homes, driving their cars, and a variety of other sources, the overall GNP for the consumer will rise.
Economic growth is affected through significant fluctuations in inflation of oil and gas. If you look throughout history when there have been fluctuations in gas and oil prices you have vast fluctuations in the economy of our country....