What is the latest financial news regarding oil price increase (July 2018) and why is it...

What is the latest financial news regarding oil price increase (July 2018) and why is it important ? How will it affect the U.S. economy?

Solutions

Expert Solution

The latest news regarding oil price is that the prices of WTI crude have fallen to $73.18, down $0.76. The prices of Brent crude is $77.42, up $0.12. Roughly the prices have increased since last week. WTI is $3 higher while Brent is higher by $1.30 than last week. The oil prices are important due to the huge volume of oil consumption. They are important both on a micro and macro level.

On a micro level the consumders of the US Economy are hit with an increase in oil prices due to increase in their utility bills. The cost of production of goods and correspondingly prices of general consumption goods is also affected due to increase in oil prices. This slowly causes inflation in the economy as a whole. An oil price hike can also depress the supply of other goods due to higher cost of production thus causing shortages. This in turn will lead to higher imports and loss of valuable foreign exchange in the economy.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Explain why in the medium run an increase in the price of oil will cause an...

Explain why in the medium run an increase in the price of oil will cause an increase in the unemployment rate.

Explain why during the short run, an increase in the price of oil will cause an...

Explain why during the short run, an increase in the price of oil will cause an increase in the interest rate.

Assume there is a temporary increase in oil prices. a) What will happen to the price...

Assume there is a temporary increase in oil prices. a) What will happen to the price level, unemployment, and output when the oil prices increased in the short-run? Show it on a graph. b) Now suppose the government does not intervene? How will the economy adjust in the long-run? Explain. c) Now suppose the government decided to intervene. What can be done? Give one example of fiscal policy and one example of monetary policy with the reasoning behind them? How...

In the month of July, Adam’s oil performed 4,000 oil changes at a price of $20....

In the month of July, Adam’s oil performed 4,000 oil changes at a price of $20. During the month, fixed costs were $18,000 and variable costs were 40% of sales. Show your math work for all parts of this problem. 1a. First do a CVP income statement (show the percents, the per unit costs, and the totals): Determine the contribution margin in total dollars, per unit, and as a ratio. (Take the numbers from the income statement above, but also...

An oil price _______ is a sudden increase or decrease in the nominal or real price...

An oil price _______ is a sudden increase or decrease in the nominal or real price of oil. This is an example of a ________ -side shock. Fill in the blanks

Using your Starbucks' latest financial data (2017 or the latest quarter for 2018 that’s available), present...

Using your Starbucks' latest financial data (2017 or the latest quarter for 2018 that’s available), present the data and identify the company’s cost structure: 1. What percentage is variable cost (to sales?) 2. What percentage is fixed cost (to sales?) 3. What is the gross margin? 4. Is breakeven point predictive from the info you see in the financial statements? If yes, show computations and provide a short form (2 or 3 statements) analysis. 5. Is degree of operating leverage...

What is stagflation? Explain how the increase in the price of oil can cause stagflation and...

What is stagflation? Explain how the increase in the price of oil can cause stagflation and draw a graph to illustrate this outcome.

5. An increase in the price of oil causes a. a decrease in the demand for...

5. An increase in the price of oil causes a. a decrease in the demand for substitute goods. b. an increase in the price of substitute goods. c. an increase in the demand for complementary goods. d. an increase in the price of complementary goods. 6. During the postwar period, changing patterns of consumer demand led to changes in the distribution of jobs in the US economy. In particular, the income elasticity of demand for many consumer products was ____________...

Suppose there is an exogenous increase in the price of oil in an economy. Use the...

Suppose there is an exogenous increase in the price of oil in an economy. Use the aggregate demand and supply model to illustrate and examine the impact of the oil-price increase on output, employment and the price level in both the short run and the long run. If the Bank of Canada cares about keeping output and employment at their natural-rate levels, what is the policy response of the Bank of Canada? What is the impact of policy response on...

Johnson Oil & Gas sold 12,500 BBLs of oil for the year 2018 at a price...

Johnson Oil & Gas sold 12,500 BBLs of oil for the year 2018 at a price per BBL of $48. Revenues and costs for Johnson Oil & Gas are presented below: Revenue $ 825,000 G&G Costs $ 650,000 Acquisition Costs $ 1,500,000 Exploratory dry holes $ 3,000,000 Successful exploratory wells $ 5,000,000 Development wells, dry $ 900,000 Development wells, successful $ 735,000 Production facilities $ 610,000 Production costs $ 200,000 Successful Efforts Amortization for 2018 $ 200,000 Accumulated DD&A $ ...

Subjects