Chapter 1 -Media Article
"Cheaper oil narrows US trade gap"
BBC News -Thursday, November 9, 2006
On Thursday, November 9th, United States of America widens trade with China. They traded to a record of $23 billion. Chinese televisions, mobiles phones, and toys are some of the things that are going to arrive in United States of America before Christmas.
Americans and the Chinese have been in a politcally sensitive conflict. Americans believe that China keeps its currency low to boost their exports. In September's figures, it showed that America's imports fell 2.1% as exports increased 0.5%. This came from a $3.1 billion drop in America's foreign oil bill. Their oil bill dropped 10.5% to $26.3 billion.
The Democrates--who have control of United States of America's House of Representatives--said they will address this change.
Relationship to Ch.1-Resource and Scarcity
With their drop in oil bill, America can afford to increase their exports. Also they don't need to import as much because they can produce more. A smaller oil bill means that they can still charge their citizens the same amount of money for their oil, or they can lower the price of oil. Personally, I think they will lower it a bit so American citizens cannot complain, but the government will take advantage of the extra pocket money.
Let's just assume that the American government will lower oil prices due to the drop in their oil bill. With a lower price, the demand curve is obviously going to increase. More and more demand will be made for the limited amount of oil. Soon, prices will increase again. United States of America needs oil to support their troops in Iraq.
Aside from the war in Iraq, I think any other natural disasters such as Hurricane Katrina and Rita will affect oil prices. Much more oil will be in demand and the price will simply increase.
Will the drop in oil bill boost America's economy? Will it decrease its imports even more?
I think that it will help America's already prospering economy. Despite what people want to think, more money means more power. With this, America can increase its exports to earn more profit.
BBC News -Thursday, November 9, 2006
On Thursday, November 9th, United States of America widens trade with China. They traded to a record of $23 billion. Chinese televisions, mobiles phones, and toys are some of the things that are going to arrive in United States of America before Christmas.
Americans and the Chinese have been in a politcally sensitive conflict. Americans believe that China keeps its currency low to boost their exports. In September's figures, it showed that America's imports fell 2.1% as exports increased 0.5%. This came from a $3.1 billion drop in America's foreign oil bill. Their oil bill dropped 10.5% to $26.3 billion.
The Democrates--who have control of United States of America's House of Representatives--said they will address this change.
Relationship to Ch.1-Resource and Scarcity
With their drop in oil bill, America can afford to increase their exports. Also they don't need to import as much because they can produce more. A smaller oil bill means that they can still charge their citizens the same amount of money for their oil, or they can lower the price of oil. Personally, I think they will lower it a bit so American citizens cannot complain, but the government will take advantage of the extra pocket money.
Let's just assume that the American government will lower oil prices due to the drop in their oil bill. With a lower price, the demand curve is obviously going to increase. More and more demand will be made for the limited amount of oil. Soon, prices will increase again. United States of America needs oil to support their troops in Iraq.
Aside from the war in Iraq, I think any other natural disasters such as Hurricane Katrina and Rita will affect oil prices. Much more oil will be in demand and the price will simply increase.
Will the drop in oil bill boost America's economy? Will it decrease its imports even more?
I think that it will help America's already prospering economy. Despite what people want to think, more money means more power. With this, America can increase its exports to earn more profit.
posted by Pattie at
5:31 PM
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