+ 1-888-787-5890  
   + 1-302-351-4405  

Essay/Term paper: "got those opec blues again" and "rational exuberance"

Essay, term paper, research paper:  Management

Free essays available online are good but they will not follow the guidelines of your particular writing assignment. If you need a custom term paper on Management: "Got Those OPEC Blues Again" And "Rational Exuberance", you can hire a professional writer here to write you a high quality authentic essay. While free essays can be traced by Turnitin (plagiarism detection program), our custom written essays will pass any plagiarism test. Our writing service will save you time and grade.

"Got those OPEC Blues Again" and "Rational Exuberance"


Since March of 1999, when the price of West Texas Intermediate crude oil was at $13 a barrel, we have seen a steady increase in prices in all phases of the economy. OPEC, the organization that is largely responsible for setting production goals in the Middle East, was under fire to find ways to increase prices. OPEC members at this time "pledged to cut back the supply of crude and push oil prices higher." (Business Week, 48) The results were better than most expected: crude oil prices were almost $27 a barrel on November 23, 1999, the highest price since the 1991 Gulf War. (Business Week, 48) The demand for oil is outpacing current supply by 2.8 million barrels, causing some in Congress to push for relief by tapping into the Strategic Petroleum Reserves. (Business Week, 49) The rapid increases in prices have had a welcome effect on "Big Oil", however. Companies such as BP Amoco, Chevron and Royal/Dutch Shell Group have posted 15% increases in earnings (Business Week, 49) This trend is expected to continue, with L Bruce Lanni, an analyst at CIBC World Markets Inc. noting, "I see clear sailing ahead for the next two to three years." (Business Week, 49)

"Happy days are here again!" This quote, noted by Jodie Allen of U.S. News and World Report, refers to the booming U.S. economy. (Allen, 71) The stock market, as of November 8, 1999 was flying high, posting strong gains, prompting inflationary fears and a hard once-over of the situation by Federal Reserve Chairman Alan Greenspan. However, the numbers are extraordinary. The Gross Domestic product surged at an annual rate of 4.8% in the third quarter of 1999. The employment cost index, which measures total compensation paid to workers in a broad sampling of jobs, rose by 3.1 percent over the past 12 months. (Allen, 71) But, cautions Princeton economist Alan blinder, "this is a change in the measurement system, not in the reality." (Allen, 71) Still, he concedes, "the underlying reality was looking good even in the older data." (Allen, 71) Even in this seemingly booming economy, Greenspan warns "It is not clear" whether interest rate hikes the Federal Reserve has already made will suffice to prevent overheating of the economy (Allen, 71)


In the case of OPEC"s decision to cut supply to raise prices, it is clear that all sectors of the economy will be affected in some way. This decision causes a shift of the Aggregate Supply curve, because of the resulting increase of energy prices. Looking at Oil on a simple Supply/Demand curve, we see that the resulting decrease in supply and saying demand is equal, or ceteris paribus, results in the increase in prices that OPEC was looking for. See the following graph:

Notice how the shift of the AS curve from AS1 to AS2 results in a price level adjustment from P1 to P2.

The economy as a whole as suffered from this increase in oil prices, however, there is little reflection in the stock market. As unemployment stays low, we are in a "help wanted" economy—firms are looking for "warm bodies" to fill needed positions. We also have seen a tremendous rise in GDP and in personal spending. The combination of low unemployment and higher than normal GDP has Fed Chairman Alan Greenspan worrying about how to cool off the economy a bit to control inflation. Unfortunately for some of us, his "big stick" is raising interest rates, increasing the cost for both firms and individuals to borrow money. This will have the desired effect, as the shift in monetary policy will cause aggregate output to fall. But Greenspan will have achieved his goal: keeping inflation low.


In my humble opinion, as a student, the gas prices do affect me, as the do everyone. There seems to be relief in the future, as OPEC may decide this week to increase production, helping lower costs to a more "reasonable" level. The one thing I find interesting, however, is that there has not be as much complaining about these gas price increases. This can be attributed to how the economy is performing as a whole. Also, although I may not like it, Alan Greenspan"s monetary policy has been very sound and the resulting increases in interest rates will have the desired effect. It will be interesting to see how the upcoming Presidential elections help or hinder the economy.


"Got those OPEC Blues Again," Business Week, December 6, 1999, 48-49.

Allen, Jodie T., "Rational Exuberance," U.S. News and World Report, November 8,

1999, pp. 71.


Other sample model essays:

Management / Goverment Spending
Government Spending & Budget As many Federal departments and agencies lurch into an era of running without funds, the leaders of both parties of Congress are spending less and less time searching ...
Should our economy be run by a doctrine that was made popular by a group of French writers called physiocrats in the mid-1700s? This doctrine is called laissez-faire and it literally means to let or ...
April 17, 1996 For a number of reasons, business enterprise in New York grew by leaps and bounds between 1825 and 1860. New York's growth between the years 1825 a...
EXECUTIVE SUMMARY Harley-Davidson is the largest market share holder of motorcycles over 750cc in the United States. After the expansion of our production and distribution capacity, we wi...
Has Technology Made Strategy Obsolete? It has been said that, "improvements in technology for waging war have made strategy increasingly irrelevant." This is not the case; strategy is actual...
Management / Health & Safety
"The Great Atlantic and Pacific Company of Canada is committed to providing both employees and customers with a safe and healthy working and shopping environment. All reasonable efforts will be made ...
There are many reasons for the employees to get involved in a wellness program. Whether they like it or not overall wellness will affect their everyday life, at home as well as at work. The fact of th...
The location of agriculture at all scales is the result of the interaction between physical, cultural and economic and behavioural factors. Farming in Great Britain has been characterized by techn...
The question states the transferability of business methods from one country to another, via Japanese techniques. However, in order to answer, we must define the term culture, as the term culture enc...
How To Start A Web Business By: ...
Experience with Dream Essay - Reliable and great customer service. Quality of work - High quality of work.
Browns Mills, New Jersey, United States
Dream Essay - Very reliable and great customer service. Encourage other to try their service. Writer 91463 - Provided a well written Annotated Bibliography with great deal of detail per the rubric.
Browns Mills, New Jersey, United States
it is always perfect
Frederick, Maryland, United States
The experience with Dream Essay is stress free. Service is excellent and forms various forms of communication all help with customer service. Dream Essay is customer oriented. Writer 17663 is absolutely excellent. This writer provides the highest quality of work possible.
Browns Mills, New Jersey, United States
Only competent & proven writers
Original writing — no plagiarism
Our papers are never resold or reused, period
Satisfaction guarantee — free unlimited revisions
Client-friendly money back guarantee
Total confidentiality & privacy
Guaranteed deadlines
Live Chat & 24/7 customer support
All academic and professional subjects
All difficulty levels
12pt Times New Roman font, double spaced, 1 inch margins
The fastest turnaround in the industry
Fully documented research — free bibliography guaranteed
Fax (additional info): 866-332-0244
Fax (additional info): 866-308-7123
Live Chat Support
Need order related assistance?—Click here to submit a inquiry
© Dreamessays.com. All Rights Reserved.
Dreamessays.com is the property of MEDIATECH LTD