Economics

A.Choose a period when oil colour costs brace been a problem to the Australian economy. Show the effect on gross domestic product From the mid 1980s to Sep 2003, the inflation-adjusted price of a set of crude oil was generally under $25/barrel. By Aug 2005 it was $60 and rose to a peak of US$one hundred forty- quin per barrel in July 2008, which was more than 250% above the level five years prior from then. succession the appreciation of the AUD over late years had helped to lessen the effect on Australian businesses and consumers, Australian dollar oil prices in real terms were rough their highest levels on record. Commentators attributed these price increases to many factors, decline in crude reserves, worries over peak oil, Middle East tension, political unstableness in oil producing regions and oil price speculation. By 2008, such pressures appeared to have had taken their toll given the onset of global recession. The recession caused demand for energy to shrink in late 2008 and the prices plunged. While the oil shocks of 1970s were largely due to tot disruption that led to rapid hike in prices, the upstart trend reflects increase in demand against a irresolute supply side response.

For Australian economy as a whole, the importance of oil had declined over time, with the volume of oil consumed per unit of real GDP now around 40% on a lower floor that during the second OPEC oil price surge in 1980. using up on oil is estimated to be around 4% of GDP which is still lower then its level in 1970s, this implies a significant reduction in real household buy power in recent years due to oil prices. Although Australia is a net exporter of energy, due to escalated oil prices Australia has tended to run a deficit in trade of oil related products. While this implies a significant reduction in domestic purchasing power, some of the factors that drove the oil prices- such as arduous growth in Asian economies, have led to considerable increase of Australias major energy exports, such as iron ore, coal & natural gas.... If you want to get a full essay, order it on our website: Ordercustompaper.com

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