Economic Indicators in the Oil Industry Essay Example | Topics and Well Written Essays - 500 words

Economic Indicators in the Oil Industry - Essay Example The six economic indicators selected are inflation rate, unemployment rate, real gross domestic product per capita, population growth rate, amount of housing & vehicles in comparison with population size, and consumer spending. Inflation is an indicator that determines the stability of an economic system. The desired state is to have a low inflation rate. A currency that is possibly the most stable monetary unit as far as having a historical low inflation is the U.S. dollar. On the flip side a high inflation is bad sign since it implies the customer is losing a lot of purchasing power over time. A high inflation could lead to disaster and an escalation to hyperinflation which is a chaotic economic state whose latest victim is the African nation of Zimbabwe (CultureGrams, 2007). The unemployment rate of country provides insight into how many potential customer there may be for a particular product. A person without employment has a limited budget thus can not spend much on consumer products. A low unemployment rate is a rate that hovers around five percent or below. The real gross domestic product of a nation per capita provides information about how much money each person in community represents for the economic system. The higher the better the economy, but this numeric figure must be compared against the cost of living of the inhabitants of the region. The population growth rate provides insight into how big a specific marketplace will become in the future. The population growth rate is low in China due to the 1979 one child per matrimony restriction, in other parts of the world such as Latin America the population growth rate high, for example the population of Mexico is expected to grow by a cumulative 50% by the year 2030 (Whitbeck, 1999). The last two economic indicators that will discuss are consumer consumption and the total housing and vehicle units in comparison with the population of