How does oil affect the economy?
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Higher oil prices means higher prices for our products. Most products are transported by using oil and trucks, or some other transportation methods, for example. This also includes services, like flights. Here is a website that goes over details on the affects of oil prices: http://www.wtrg.com/prices.htm.
Oil will always have an impact, until an alternative energy source is shares in oil's current market dominance. Electricity seems to be taking a small share at this point.
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M$Some governments try to artificially shield the economy from changes in oil price level by providing subsidies. By providing subsidies, the government bears the burden of increase gas price instead of transferring it to private sector.
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