Friday, November 11, 2011

Why the rise in oil prices might be a good thing

With the oil prices hovering around a height of $100 for the first time since summer it may not be good for microeconomics but it's a good sign for macroeconomics, thank you paradox of thrift. With the economy being able to hold the price of oil so high it is a good sign that the US economy isn't going to double dip into another recession. In line with that, the fear of Europe's debt crisis spreading to the US may have been slightly disproved as we see the prices of oil climb. Although there is a note of joy in this news we also need to take into consideration that with the prices of oil are climbing due to a decrease in the supply so we need to start looking for ways to conserve or find new sources of oil especially with the US exporting more.

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