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Gas Prices In America Essay

499 Words2 Pages

"Envision going to get your car gasoline for a big day ahead of you, however, you notice that the gas prices increase at your favorite gas station. Distraught, you still fill it up, but ponder over why are the gas prices have increased. This brought you to a realization that we depend too much on nonrenewable sources which can harm our society later on. Dating back to the 1970’s, petroleum has brought a big effect on our society. Stagflation, an economic slow growth of high unemployment and prices, brought Americans to fear for their economic state. Through the energy crisis, society began to distrust the U.S. dollar due to its unprofitable value. Goods and services' prices began to rise bringing the U.S. into a negative supply shock. Due to Organization of the Petroleum Exporting Countries(OPEC) increase in oil prices, U.S. monetary policy, how much money you can print, was too loose. The money supply increased faster than the economy …show more content…

Most automobiles with an economical gas mileage purchases have decreased. In addition, speed limits were changed to reduce the consumption of gas. The automobile industries collapsed due to the inactivity of purchasing expensive gas-consuming cars. As a result, workers from those industries were the lay-off. In addition, American's income could not keep up with inflation causing wages to only buy the necessities. As a result, this led companies out of businesses which further increased the unemployment rate. The Federal Reserve (FED) tried to boost the money supply and reducing interest rates. However, the results didn't rise due to the low productivity of the nation and its oil shortage. In the end, the excess money supply triggered inflation. This brought companies to expect a rise in cost which brought them to layoff workers. This brought the economy to follow a business cycle with

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