ECOSPIRE
ECONOMICS SOCIETY
SHAHEED BHAGAT SINGH COLLEGE
UNIVERSITY OF DELHI
AN ECONOMIC-POLICY CASE COMPETITION
ARTHIK
AROGYA 4.0
FACE THE CHASE TO DECODE
THE CASE
CAST STUDY
Narnia had become the world's largest economy in the late 1800s but
dependence on oil has long influenced its foreign policy. Narnia’s inflation
peaked in the 1970s. While the average inflation rate for the entire decade was
only 6.8%, this rate is nearly three times higher than that of the two decades
prior and double the average over the past extended period. Talking about the
average annual unemployment rate of this country, was about 5.4 per cent in
the early 1970s.
Narnia was the biggest oil producer in the world during World War Two in the
1950s and the 1960s. But by 1973, Narnia had the largest oil consumption in
the world, consuming one-third of all oil produced but having only 6% of the
world's population. Oil imports were increasingly required to maintain Narnia’s
economic expansion and growth due to huge industrial growth, the
construction of roads, and the creation of automobiles.
The crisis began when OPEC (Organization of the Petroleum Exporting
Countries) member countries retaliated against Narnia in response to its
political and military support for Israel, mainly through the delivery of military
equipment and arms, which played a key role in Israel's wars against
neighbouring countries. Oil exports to Narnia and its allies were abruptly
stopped after OPEC members imposed an oil embargo. By the end of the
embargo, the price of oil had risen nearly 300%. This resulted in significant
energy shortages, a sharp increase in oil prices, and an economic crisis in
Narnia. The Great Inflation brought about a period of extremely high and
unsettling volatility for the residents due to the constant and long-lasting rise
in prices. The threat of many people's savings being used up was significant,
especially given the accompanying loss of purchasing power.
Even before that period, survey data demonstrates that support for the
government decreased substantially between 1964 and 1970. Before the early
1970 oil crisis, the auto industry had a long and illustrious history. However,
everything that has happened since then can be traced back to when members
of OPEC decided to raise the posted price of a barrel of oil by a staggering
70%. Until that time, the auto industry had believed that vehicles would
become larger and more powerful every year. The majority of state-built
automobiles were inefficient in terms of fuel use. However, because gasoline
was very inexpensive, poor performance was not an issue. The state
corporations were so unfamiliar with the notion of fuel economy that they gave
little attention to even mentioning it.
In recapitulation, the early 1970s are the years of the centre of
mismanagement for this country. At this juncture, only a miracle seems to be
the way to resuscitate the economy. Can you find a way to save this economy
from sinking?