Since Fall of 2013, 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. Given that prediction of falling global demand for petroleum oil and rising supply of oil caused significant decline of oil price to come down to as low as $45 per barrel in January 2015 from its price of o $100 in January 2014.
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 2014 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 has sharply decline at a 10 -year low level within the range between $50 and $54/barrel. Read this article on most recent price forecast on crude oil. http://www.inddist.com/news/2015/01/gasbuddy-releases-fuel-price-outlook-2015
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 declining but volatile oil prices. 4 pts.
Note: Keep in mind that the oil price is not the same as the price level in macroeconomics diagrams, even though the changes in oil price directly and indirectly affect the general price level (such as CPI and GDPD). You do not necessarily need to draw the diagram for oil market to answer this question. But drawing of macroeconomic model of AD-AS behavior impacted by the changes in oil price is required to substantiate your answer.
Why do you think accounting is so important to a business?Jul 22 2021
Use simpson's Rule with n=10 to approximate the area of the surface obtained by rotating the curve about the x-axis. COmpare your answer with the value of the integral p...Jun 17 2021
Indorsements.A check drawn by Cullen for $500 is made payable to the order of Jordan and issued to Jordan. Jordan owes his landlord $500 in rent and transfers the check t...Aug 04 2021
I need these solved using: step-by-step method. **not using excel** Each one of these needs to be worked out : using step-by-step method showing the work. 4.If you were g...Jul 07 2021
What are the three particular features that hinder (environmental) sustainability? Name all three and explain one in detail by illustrating examples from business.Aug 26 2020
Insert commas, semicolons, and colons to punctuate the following sentences correctly. Do not add words or periods to create new sentences. Write C after the sentence if i...Jul 14 2021
Part c requires a knowledgeable comment regarding any significant items disclosed in the statement of cash flows. Thank youP 10-6 Sampson Company's balance sheets for...Mar 17 2020
Mathis Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April:On April 1,Mathis Company purchased mer...May 12 2020
On a morning of a day when the sun will pass directly overhead, the shadow of a 91-ft building on level ground is 312 A long. At the moment in question, the angle the sun...May 13 2021
The graphs show the constraint and several level curves of the objective function. Use the to graph approximate the indicated extrema.a. Maximize: Constraints: b. Minim...Jun 15 2021