Many economists feel that oil prices do not have a significant impact on inflation because

Question

Quizplus · Accepted Answer

Oil price increases are considered to be relative price increases because they reflect changes in demand and supply conditions in the oil market, rather than an increase in the overall level of prices in the economy. Additionally, many central banks use core inflation measures that exclude the volatile energy and food prices, which can further mitigate the impact of oil price fluctuations on inflation. Price ceilings on gasoline (A) are not common in many countries and do not apply to other oil products. Oil prices also do not get cheaper every year (B) as they are subject to market forces and geopolitical events. Therefore, D is incorrect as well.

Many Economists Feel That Oil Prices Do Not Have a Significant