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28 Sep 2019
) Since Fall of 2011, the price of oil has shown a sharp increaseagain as continuation steady rise in oil price attributed to theArab Spring (the political uprising in the Middle Eastern and NorthAfrican countries) started in the beginning of 2011. This upwardtrend of oil price has been further triggered by the recent tensionin Iran on its Nuclear proliferation and the threat of blocking theoil export through the Harmuz Strait. Accordingly, many analysts inthe energy field have predicted the likelihood of rise in oil priceup to $5/gallon by coming summer in the US market.
Given the circumstances above about the oil market, draw an AS/ADdiagram, which shows the effect on the US macro-economy of expectedoil price @ $130+ per barrel versus the oil price at $100+ perbarrel (in the beginning of 2012). In your explanation in wordsabout the diagram, you must clearly explain the connection betweenchanges in oil price and the fluctuations in macroeconomicfundamentals in the US economy. Then show the impact of continuousrise oil price on the US economy by using the AD-AS model duringthe recovery period of the economy from its great recession of2008. (The most recent price of crude oil is about$104+/barrel).
http://www.bloomberg.com/energy/
Please see the url link here in addition an older WSJ article onoil price and macroeconomic effect I attached separately ashint.
Dated June 1, 2010:
http://online.wsj.com/article/SB10001424052748704269204575271213611411940.html?KEYWORDS=oil+price
Jan 28, 2011:
http://money.cnn.com/2011/01/28/markets/oil_egypt/index.htm
Label your diagram clearly and explain how higher oil prices impacteither AS, AD or both.
Finally, explain why sharp rise in oil prices might not necessarilyhave negative or positive impact on the US equity markets even atthe current trend of volatile oil prices.
4 pts.
Note: Keep in mind that the oil price is not the same as the pricelevel in macroeconomics diagrams, even though the changes in oilprice indirectly affect the general price level (such as CPI andGDPD). You do not necessarily need to draw the diagram for oilmarket to answer this question. However, drawing of macroeconomicmodel of AD-AS behavior impacted by the changes in oil price isrequired.
) Since Fall of 2011, the price of oil has shown a sharp increaseagain as continuation steady rise in oil price attributed to theArab Spring (the political uprising in the Middle Eastern and NorthAfrican countries) started in the beginning of 2011. This upwardtrend of oil price has been further triggered by the recent tensionin Iran on its Nuclear proliferation and the threat of blocking theoil export through the Harmuz Strait. Accordingly, many analysts inthe energy field have predicted the likelihood of rise in oil priceup to $5/gallon by coming summer in the US market.
Given the circumstances above about the oil market, draw an AS/ADdiagram, which shows the effect on the US macro-economy of expectedoil price @ $130+ per barrel versus the oil price at $100+ perbarrel (in the beginning of 2012). In your explanation in wordsabout the diagram, you must clearly explain the connection betweenchanges in oil price and the fluctuations in macroeconomicfundamentals in the US economy. Then show the impact of continuousrise oil price on the US economy by using the AD-AS model duringthe recovery period of the economy from its great recession of2008. (The most recent price of crude oil is about$104+/barrel).
http://www.bloomberg.com/energy/
Please see the url link here in addition an older WSJ article onoil price and macroeconomic effect I attached separately ashint.
Dated June 1, 2010:
http://online.wsj.com/article/SB10001424052748704269204575271213611411940.html?KEYWORDS=oil+price
Jan 28, 2011:
http://money.cnn.com/2011/01/28/markets/oil_egypt/index.htm
Label your diagram clearly and explain how higher oil prices impacteither AS, AD or both.
Finally, explain why sharp rise in oil prices might not necessarilyhave negative or positive impact on the US equity markets even atthe current trend of volatile oil prices.
4 pts.
Note: Keep in mind that the oil price is not the same as the pricelevel in macroeconomics diagrams, even though the changes in oilprice indirectly affect the general price level (such as CPI andGDPD). You do not necessarily need to draw the diagram for oilmarket to answer this question. However, drawing of macroeconomicmodel of AD-AS behavior impacted by the changes in oil price isrequired.
Given the circumstances above about the oil market, draw an AS/ADdiagram, which shows the effect on the US macro-economy of expectedoil price @ $130+ per barrel versus the oil price at $100+ perbarrel (in the beginning of 2012). In your explanation in wordsabout the diagram, you must clearly explain the connection betweenchanges in oil price and the fluctuations in macroeconomicfundamentals in the US economy. Then show the impact of continuousrise oil price on the US economy by using the AD-AS model duringthe recovery period of the economy from its great recession of2008. (The most recent price of crude oil is about$104+/barrel).
http://www.bloomberg.com/energy/
Please see the url link here in addition an older WSJ article onoil price and macroeconomic effect I attached separately ashint.
Dated June 1, 2010:
http://online.wsj.com/article/SB10001424052748704269204575271213611411940.html?KEYWORDS=oil+price
Jan 28, 2011:
http://money.cnn.com/2011/01/28/markets/oil_egypt/index.htm
Label your diagram clearly and explain how higher oil prices impacteither AS, AD or both.
Finally, explain why sharp rise in oil prices might not necessarilyhave negative or positive impact on the US equity markets even atthe current trend of volatile oil prices.
4 pts.
Note: Keep in mind that the oil price is not the same as the pricelevel in macroeconomics diagrams, even though the changes in oilprice indirectly affect the general price level (such as CPI andGDPD). You do not necessarily need to draw the diagram for oilmarket to answer this question. However, drawing of macroeconomicmodel of AD-AS behavior impacted by the changes in oil price isrequired.
Nusrat FatimaLv10
28 Sep 2019
