Please answer the two questions as paragraph and cite any resources used ——— In the first module, we are introduced to the topic of interdependence of the global economy, meaning how multiple countries interact and rely on one another to produce and ship goods. With this, we also learn about how world events or “common shocks” can have a large impact on the global economy. In the article, “How does the war in “Ukraine affect Oil Prices?” author Maciej Kolaczkowski discusses the factors and impact the Russian invasion in the Ukraine had on global oil prices and consumers. Kolaczkowski mentions, that prior to Russia invading Ukraine crude oil prices were already inflated, however when the invasion happened, those prices rose to over $110 per barrel. One of the first factor that Kolzaczkowski states, played a role in this increase was related to bans sanctioned on Russia oil imports. Following the invasion, President Biden signed an executive order banning imports of Russian oil, natural gas an coal. As a result of this, other countries followed causing oil and gas prices to soar (Kolzackowski, 2022). With relation to the consumer, Kolaczkowski states, “High prices are being passed over to consumers at the pump, in their gas, heating and electricity bills. And high energy prices contribute to increased cost of virtually all goods and services further fueling inflation expectation” (Kolaczkowski, 2022). The Russian invasion on Ukraine perfectly represents the Macro Economy and how determinants create outcomes that affect prices and growth. As mentioned previously, the consumer saw the price they pay for gas and energy increase and because of this, prices for other goods and services rose. Meaning the consumer saw increases in other areas, in addition to what they were paying at the gas pump. For growth, because Russia is a large oil producer, with the sanctions that were imposed on them, the growth of their economy was impacted as they started to lose opportunities to export their oil to other countries. What I found interesting is how one event can create a ripple effect across the globe and have an impact on billions of people. Kolaczkowski, M. (2022, March 4). How does the war in Ukraine affect oil prices?
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