A decrease in the supply of oil makes capital and labor less productive.

Question

Quizplus · Accepted Answer

A decrease in the supply of oil can lead to higher prices, which in turn can reduce the profitability of businesses and reduce the purchasing power of consumers. This can cause a decrease in capital investment and a reduction in employment, which ultimately makes both capital and labor less productive. Oil is a key factor in many industries, and its scarcity can have far-reaching effects on productivity and economic growth.

A Decrease in the Supply of Oil Makes Capital and Labor