How does increase in price of crude oil increase inflation?
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Oil price increases are generally thought to increase inflation and reduce economic growth. In terms of inflation, oil prices directly affect the prices of goods made with petroleum products. ... Increases in oil prices can depress the supply of other goods because they increase the costs of producing them.
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ᴏɪʟ ᴘʀɪᴄᴇ ɪɴᴄʀᴇᴀꜱᴇꜱ ᴀʀᴇ ɢᴇɴᴇʀᴀʟʟʏ ᴛʜᴏᴜɢʜᴛ ᴛᴏ ɪɴᴄʀᴇᴀꜱᴇ ɪɴꜰʟᴀᴛɪᴏɴ ᴀɴᴅ ʀᴇᴅᴜᴄᴇ ᴇᴄᴏɴᴏᴍɪᴄ ɢʀᴏᴡᴛʜ. ɪɴ ᴛᴇʀᴍꜱ ᴏꜰ ɪɴꜰʟᴀᴛɪᴏɴ, ᴏɪʟ ᴘʀɪᴄᴇꜱ ᴅɪʀᴇᴄᴛʟʏ ᴀꜰꜰᴇᴄᴛ ᴛʜᴇ ᴘʀɪᴄᴇꜱ ᴏꜰ ɢᴏᴏᴅꜱ ᴍᴀᴅᴇ ᴡɪᴛʜ ᴘᴇᴛʀᴏʟᴇᴜᴍ ᴘʀᴏᴅᴜᴄᴛꜱ. ... ɪɴᴄʀᴇᴀꜱᴇꜱ ɪɴ ᴏɪʟ ᴘʀɪᴄᴇꜱ ᴄᴀɴ ᴅᴇᴘʀᴇꜱꜱ ᴛʜᴇ ꜱᴜᴘᴘʟʏ ᴏꜰ ᴏᴛʜᴇʀ ɢᴏᴏᴅꜱ ʙᴇᴄᴀᴜꜱᴇ ᴛʜᴇʏ ɪɴᴄʀᴇᴀꜱᴇ ᴛʜᴇ ᴄᴏꜱᴛꜱ ᴏꜰ ᴘʀᴏᴅᴜᴄɪɴɢ ᴛʜᴇᴍ.
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