<p>Two things will happen:</p>

<p>Firstly, everyone will effectively have had their real incomes rise by 10% (assuming this new energy costs nothing). They will then spend or save this income on other goods besides energy, increasing overall output (note, savings is used for investment as well).</p>

<p>Secondly, energy consumption will likely increase by a large amount now that it is nothing. People who were mindful about their energy consumption due to cost concerns will now not care. Therefore, people will be consuming more energy.</p>

CC BY-SA 3.0
2016-10-17T00:35:01.200Z
2016-10-17T00:35:01.200Z
zzzzz94
<p>Imagine a case where an average of 10% of the income of the people in a certain country is spent on petrol(gas). Now someone comes up with an invention, say a DIY unlimited power source which anyone can make for practically nothing. Obviously the price of oil will fall. But apart from that, how are the other economic indexes going to be affected? Will GDP rise or fall. What kind of parameters of the country will be affected?</p>

CC BY-SA 3.0
2016-10-18T06:09:20.787Z
That is very, very broad. It depends on many parameters, like the details of the new invention (price, accessibility, etc.), the countries considered, etc. I also think that there's a rather large part of a speculation required. Both issues make it hard to answer the question.
clem steredenn
<macroeconomics>
How do I quantitatively visualize this situation?
user2277550
# How do I quantitatively visualize this situation?

(Asked by: username_0 on 2016-10-16)

Imagine a case where an average of 10% of the income of the people in a certain country is spent on petrol(gas). Now someone comes up with an invention, say a DIY unlimited power source which anyone can make for practically nothing. Obviously the price of oil will fall. But apart from that, how are the other economic indexes going to be affected? Will GDP rise or fall. What kind of parameters of the country will be affected?

**Tags:** macroeconomics

> **Comments:**
> **username_1**: That is very, very broad. It depends on many parameters, like the details of the new invention (price, accessibility, etc.), the countries considered, etc. I also think that there's a rather large part of a speculation required. Both issues make it hard to answer the question.  

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## 1 answers

### Answer by username_2 on 2016-10-17. Score: -1

Two things will happen:

Firstly, everyone will effectively have had their real incomes rise by 10% (assuming this new energy costs nothing). They will then spend or save this income on other goods besides energy, increasing overall output (note, savings is used for investment as well).

Secondly, energy consumption will likely increase by a large amount now that it is nothing. People who were mindful about their energy consumption due to cost concerns will now not care. Therefore, people will be consuming more energy.


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