Oil and Gas How Both Affect the Economy
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 an
d 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. If you look at the United States as a model you will see a country that handles oil with precision. When the oil industry is in a downturn, the government can step in and regulate taxes and stimulate investment by having the central bank pump in funds that would not otherwise be used. When the oil industry is doing fine, the government can sit back and reap the prosperity of increases in employment and a rise in demand for oil. The prices will be lower for gas and oil, which means consumption will be up and the economy will be up too. Countries around the world can learn how to handle oil to the extent that it creates an agenda that the benefits far outweigh the costs. It is definitely true that an economy of a country can be vastly affected by the demand, consumption, and supply of oil. The affect that good supplies of oil has on a country's economy is one that can only be measured in the sense that it is inevitable that they will be affected. As long as we drive cars that are fueled by gas and we use heat in the winter time, oil will always be a strong factor in determining the growth of a countries economy. In the United States, we have the strong infrastructure to adapt to problems that the instability of both the supply and demand of oil will cause. Countries need to look within themselves for managed growth in order to steady their economies if oil is what sparks their economy. A strong central bank and government will allow for funds to be invested in s
Some common words found in the essay are:
Brazil Brazil, , Texas Texas's, Middle East, oil gas, economic growth, oil prices, reliance oil, central bank, oil industry, country's economy, economy country, gas oil, strong central, affected oil gas, affect economic growth, economic growth ¨,
Approximate Word count = 1530
Approximate Pages = 6 (250 words per page double spaced)
|
