Affects of Oil on the Potential Level of Output
Logistics and Statistics | Market Movements | Comparison | OPEC | Oil: Post 9/11
Potential Level of Output
The increase in the price of crude oil hurts everyone from the consumer to the businesses that have to transport their goods. As the price of crude oil goes up the amount of dispossible income regular consumers have goes down; reducing consumption and shifting the potential level of output back and to the left. Businesses have to pay higher shipping costs to get their goods to market and so they either raise the price of goods or reduce labor costs which also reduces the potential level output. With everything else remaining the same, if gas prices go up, then the potential level of output will decrease and the price level will go up.
Logistics and Statistics
|
Market Movements
|
Comparison
|
OPEC
|
Oil: Post 9/11
