1973 Oil Embargo: The 1973 oil embargo, primarily led by OPEC nations, resulted in a sudden spike in oil prices, profoundly affecting the U.S. economy heavily dependent on oil. 1. Impact on Supply and Demand: - Supply Side: The embargo reduced the supply of oil to the U.S., leading to shortages and driving prices upward. - Demand Side: Higher oil prices influenced consumer behavior, causing a decline in demand for energy-intensive goods and services. 2. Economic Equilibrium: - The sudden reduction in oil supply created an imbalance, with prices soaring and demand contracting. - Industries reliant on cheap energy faced challenges, causing economic sectors to adjust to this new equilibrium. 3. Long-Term Effects: - The oil shock prompted investments in alternative energy sources and increased energy efficiency. - This event demonstrated the vulnerability of the U.S. economy to external energy shocks, influencing subsequent energy policies