The Oil Price Explanation of the Slowdown in Economic Growth

question 58

Multiple Choice

The oil price explanation of the slowdown in economic growth after 1973 is inconsistent with which of the following facts?

• A)Prices of used capital goods that were dependent on oil did not drop sharply when oil prices increased.
• B)The productivity slowdown began just as oil prices were quadrupled in 1973.
• C)The productivity slowdown occurred in all industrial countries.
• D)Industry-by-industry analysis of the impact on oil prices bears out the damage done by the oil price increases.

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Definitions:

Dry Climate

A climate characterized by low precipitation throughout the year, leading to arid conditions and limited vegetation.

Water Shortages

Situations where the available water supply is unable to meet the water demand, often due to drought, overuse, or contamination.

Volcanic Activity

The process of magma rising to the surface, resulting in eruptions that may release lava, pyroclastic material, and gases.

Oil Field

The region in the subsurface that contains petroleum, especially oil; also the projection of that area to the surface.