Question

Importance of oil as an economic resource in the production process for the global economy;

Answer 1

Oil plays a significant part in the economic cycle. It induces economic growth at the right price and then eventually contributes to the bust. During recessionary periods, oil prices fall quickly as demand drops, encouraging renewed consumption and the cycle begins again.Oil price increases are generally thought to increase inflation and reduce economic growth. In terms of inflation, oil prices directly affect the prices of goods made with petroleum products. ... In economics terminology, high oil prices can shift up the supply curve for the goods and services for which oil is an input.

Oil lifeblood of the industrialised nations Oil has become the world's most important source of energy since the mid-1950s. Its products underpin modern society, mainly supplying energy to power industry, heat homes and provide fuel for vehicles and aeroplanes to carry goods and people all over the world.