HIGH PRICES OF OIL AND  ECONOMY

A high price of oil will first caused cost-push inflation because oil is used in the production of most of goods.As a result, producer will faced increasing  price of raw materials as oil effect on other resources e.g gas.so if price of oil increase then the total output will decrease and growth of economy will be slow.

A cost-push comes with unemployment because  firms are  become less  confident about future and they  decrease quantity of labour force .There will be a straightforward negative effect on business investment.Government  will increase its spends due to increase in  quantity of unemployment and  this will effect tax producers.The value of saving is going to be reduced with inflation.