Give the significant trend of declining oil price

Assignment Help International Economics

Reference no: EM13181004

Since Fall of 2012, the price of oil has shown a steady decline as continued increase of global oil production that has far exceeded the rising demand for oil. Accordingly, many analysts in the energy field have had predicted the likelihood of further decline in oil price in the US market as the US continues to expand its domestic oil production with a long term objective of becoming even net exporter of oil by Y2030. Read some articles in the web on Shale Oil Production in US it s future.

Given the significant trend of declining oil price and expected independence of oil production by US in coming decade, draw an AS/AD diagram of macroeconomics model (not the oil market itself), explaining the effect on the US macro-economy of expected decline in oil price in 2013 and beyond. In your explanation in words with the help of the diagram, you must clearly explain the connection between changes in oil price and the fluctuations in macroeconomic fundamentals in the US economy. Then show the impact of continuous fall in oil price on the US economy by using the same AD-AS model during the recovery period of the economy from its great recession of 2008. The most recent price of crude oil is fluctuating within the range between $80 and $85/barrel.

Finally, explain why sharp decline in oil prices might not necessarily have positive or negative impact on the US equity markets (stock market) even at the current trend of volatile oil prices.

Reference no: EM13181004

Questions Cloud

State what is the mole fraction of helium in the solution : if 2.0 g of helium gas and 5.46 g of oxygen gas are mixed togeher, what is the mole fraction of helium in the solution?

What he though of the vietnamese people : When harry returned from a business in ho chi minh city vietnam his wife asked him what he though of the vietnamese people harry replied they're primitive people who eat animals from the streets drive wildly around town on motor scooters and talk ver..

State octene and ethene and design a synthesis : Use any other reagents that you need. Hint: you may first want to conduct some chemistry on each alkene first, then use the resulting products to make 1-decanol.

Which numbered expression can be used : Nick can throw a baseball three more than 4 times the number of feet, f, that Jeff can throw the baseball. Which numbered expression can be used to find the number of feet that Nick can throw the ball?

Give the significant trend of declining oil price : Accordingly, many analysts in the energy field have had predicted the likelihood of further decline in oil price in the US market as the US continues to expand its domestic oil production with a long term objective of becoming even net exporter of..

Find the dimensions of outdoor enclosure with most area : There are 410 feet of fencing available for the other three sides of the enclosure. Find the dimensions of the outdoor enclosure with the most area.

State nickel anode onto a pure nickel cathode : Purification of nickel can be acheived by electrorefining nickel from an impure nickel anode onto a pure nickel cathode in an electrolytic cell.

What is the standard error of the proportion of customers : Suppose that 98% of your customers in your market have internet access and you select a random sample of 500 customers. What is the standard error of the proportion of customers who don't have internet access.

Oldest mountain range formed on earth : The oldest mountain range formed on Earth during the time frame shown in the "Global Geography Through Geologic Time" animation is located ______________. The youngest mountain range formed on Earth during the time frame shown in the "Global Geogra..

User Account

All Pages