Sample Paper on Behavior Intervention Plan

In 1973, Arab oil producers declared an embargo that extremely restricted the shipment of oil to the United States (Barsky et al. 21). These producers were members of the cartel called Organization of Petroleum Exporting countries (OPEC), and they enforced the embargo on United States in retaliation to US support of Israel in the Yom Kippur war of 1973 (Bohi et al. 15). The embargo had an adverse effect on the economy of the United States because it heavily relied on the oil from these countries that were in the cartel, and had placed an embargo on the United States. The 1973 Oil Embargo acutely strained the economy of the United States that was dependent on foreign oil (Ebrahim et al. 37).

The embargo placed on the United States greatly reduced the quantity of oil circulation in the country (Hamilton et al. 56). Almost all economic activities in the country like transport, trade, and industries are dependent on the price of oil. The decrease in the supply of oil greatly increased the prices of oil from $3 per barrel to $12 per barrel, which led to the increase in the general price level of the goods and services in the country, inflation (Hamilton et al.. 78). The industries in the country will incur great expenses in production of goods, and this was brought about by the increased oil prices caused by the embargo from the oil producing countries. This in turn made the industries increase the prices to the consumers and this had a great effect on the economy of the country (Kerr et al. 1128). The transportation costs and prices of other commodities all went up with the increased prices of oil. Inflation hurt the consumers buying power in the United States, and this cost the economy of the United States (Metcalf et al., 43).

The increased price levels in the economy reduced consumer spending and industrial production. The reduced consumer spending in the country reduced the circulation of money in the economy, which brought down the economy of the country. The reduced production of industries in the country also reduced the revenue received by the government in form of taxes. The taxes were used in growing the economy of the country. Therefore, when there is a reduction in the operations by industries, the economy will not grow but will deteriorate.

The embargo placed on the United States made the operations of industries and other sectors very costly (Painter et al. 21). Some industries were forced to close down since they could not manage the losses incurred. This led to laying off many workers, and closed all doors of employment for the citizens. The unemployment rates grew at a steady rate as a result of the oil embargo imposed on the United States that had a severe effect on the economy of United States (Painter et al. 22). Unemployment increased the dependency level in the country in that there were few productive people who were depended on by a very large number of people (Painter et al. 23). This in turn caused the development and growth of the economy to stall. The little money received was used to acquire food and other basic commodities instead of activities that would have increased the economy of the country.

The state and federal governments used a lot of money for unemployment benefits instead of growing and developing the economy (Ebrahim et al. 17). This caused the economy of the United States to go down. This was caused by the lack of productivity of the citizens of the country whose jobs were lost due to the cost of the high operation that were brought about by the oil embargo on United States (Ebrahim et al., 21).

Oil embargo on the United States caused great fear and panic on the citizens (Goldthau et al. 32). In the state of panic and fear, they operated irrationally without insight and advice from the experts. This made them to cause an acute effect to be felt on the economy more than it would have been felt. Most citizens bought many of the oil products like gasoline to hoard them, with fear that there would be no oil in future (Goldthau et al., 36). This caused the government to have a shortage in supply of oil. This negatively affected the economy of the United States since the government was to come up with alternative methods, while the economic activities in the country were deteriorating at an alarming rate (Ebrahim et al., 21).

Oil embargo in the United States decreased government expenditure and reduced the income of the citizens (Yergin et al. 81). This is caused by the skyrocketing prices of oil and the shortages that are realized. These two factors reduced the GDP of the United States greatly since the GDP is dependent on such factors (Yergin et al. 83). When the GDP dropped, it automatically meant the economy was poorly performing. A country’s economy is always measured by the level and amount of the gross domestic product.

The oil embargo on the Unites States caused some automobile and other industries in United States to collapse (Kerr et al. 1130). Cars that were seen as guzzlers were avoided by the consumers since they would be very costly in running and managing. This led to loss of market for the companies and ultimately led to their closure. This affected the economy of the country deeply since the government received a ]large amount of revenues through taxes from these companies, and used it in growing and developing the economy (Metcalf et al., 78). With the collapse of the companies, came the loss of revenue earned by the government, which in turn led to a stagnant or deteriorating economy.

The oil embargo placed on the United States led to recession in the time the embargo was standing. The economic activities in the United States declined greatly leading to the recession that was felt (Hamilton et al. 89). Trade and industrial activities came to an almost stop since they all depended on the oil that was on acute shortage. This led to a drop in the economic levels in the country because of inactivity in the economy at large. This also led to low living standards to the citizens of the country. The lack of activity in the economy increased the borrowing level of the country and the accumulated debts brought many consequences to the country economically (Kerr et al. 1131). Any money generated in the economy was always used in settling the huge debts that had been incurred by the country. This brought much strain to the development and growth of the economy: it dropped drastically during the periods the oil embargo had been placed in United States of America (Metcalf et al. 101). The general effects of the oil embargo by the OPEC countries on the United States was the decline in the economic levels of the country greatly since the economic activities of the United States during that period were dependent on foreign oil (Painter et al. 98).

Works Cited

Barsky, Robert, and Lutz Kilian. Oil and the macroeconomy since the 1970s. No. w10855. National Bureau of Economic Research, 2004.

Bohi, Douglas R., and Milton Russell. Limiting oil imports: An economic history and analysis. Routledge, 2013.

Ebrahim, Zoheir, Oliver R. Inderwildi, and David A. King. “Macroeconomic impacts of oil price volatility: mitigation and resilience.” Frontiers in Energy 8.1 (2014): 9-24.

Goldthau, Andreas, and Jan Martin Witte. “Assessing OPEC’s Performance in Global Energy.” Global Policy 2.s1 (2011): 31-39.

Hamilton, James D. Historical oil shocks. No. w16790. National Bureau of Economic Research, 2011.

Hamilton, James D. Oil prices, exhaustible resources, and economic growth. No. w17759. National Bureau of Economic Research, 2012.

Kerr, Richard A. “The next oil crisis looms large—and perhaps close.” Science281.5380 (1998): 1128-1131.

Metcalf, Gilbert E. The economics of energy security. No. w19729. National Bureau of Economic Research, 2013.

Painter, David S. “Oil and the American century.” Journal of American History99.1 (2012): 24-39.

Yergin, Daniel. Energy future. Ed. Robert Stobaugh. Vintage Books, 1981.