The Impact of Rising Oil Prices on the South African Economy in Relation to the...

TABLE OF CONTENTS INTRODUCTION.1 provide VS DEMAND2 FINDINGS6 PRIMARY FACTORS.7 CONCLUSION.7 REFERENCE.9 THE IMPACT OF uprise OIL PRICES ON THE SOUTH AFRICAN ECONOMY IN RELATION TO THE DEMAND AND SUPPLY OF NEW MOTOR VEHICLES. INTRODUCTION A continual upward trend in the hurt of blunt fossil oil color in recent years has led to increase concerns about its economic implications, both abroad and in southward Africa. This study looks at the rising oil prices and their squeeze on the South African economy within the framework of go forth and demand, looking at the impact rising oil prices has had on demand and supply for vehicles as well as the impact on South African GDP growth. Cognisance moldiness be taken of the fact that this slowdown in car sales is not only related to mellow fuels prices besides is also as a result of successive increases in domestic interest rates, the introduction of the National Credit Act, high debt levels among consumers, and high levels of debt-servicing costs. For the purpose of this assignment these factors are not considered. SUPPLY VS DEMAND The demand for respectables refers to the copulation between the price of a good and the quantity of the good that consumers will be willing to net for it.

Oil has a relatively inelastic demand mainly due to the fact that there currently is no fitting and viable product substitute for it. Despite world achievement problems, rising prices, war and economic slow down at various periods, the price of oil has shown a resilient project increase in price (see fig 1). Oil price is very price inelastic. name 1. Source: WTRG Economics (2007) The oil supply demand relationship has, to an extent fuelled or influenced, the oil price hikes however this cannot be established as a fixed indicator of the rising oil price trend. Fig 2. Source: WTRG Economics (2007) However when looking at the crosswalk price elasticity of demand of motor vehicles in relation to Oil, we see a highly elastic environment.... If you want to fuss a full essay, order it on our website: Orderessay

Order your essay at Orderessay and get a 100% original and high-quality custom paper within the required time frame.