n 1970 1.3 barrels of oil produced $1,000 of GDP. In 2004 it
took only 0.64 barrels of oil. What implications does this have
for economic fluctuations in the United States today?

Question

n 1970 1.3 barrels of oil produced $1,000 of GDP. In 2004 it 
took only 0.64 barrels of oil. What implications does this have 
for economic fluctuations in the United States today?

Quizplus · Accepted Answer

The fact that it takes less oil to produce the same amount of GDP today than it did in 1970 means that the US economy is less vulnerable to spikes in oil prices. In the 1970s, when oil prices spiked, it had a severe impact on the US economy because oil consumption was directly tied to GDP. However, today, even if oil prices spike, the impact on the economy will not be as severe because the economy is able to produce the same amount of GDP with less oil.

N 1970 13 Barrels of Oil Produced $1,000 of GDP