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The objective of the study is to measure the impact of changing oil prices, and other macro economic variables like consumption, government expenditures and average exchange rates on Gross Domestic Product-GDP in the context of Pakistan’s economy. The study is secondary data based with five variables and 30 years of data. The data is taken from World Bank, State Bank of Pakistan, Economic Survey of Pakistan, Federal Reserve Bank of America, Federal Bureau of Statistics Pakistan, Pakistan Development Review, Federal Board of Revenue, OPEC and Euro Journal. First the stationarity of the variables were checked by the Augmented Dickey Fuller-unit root test. By the regression analysis tests a relationship is developed. The major findings of the study show that changing oil prices have negative relationship with GDP, while changing government expenditures and average exchange rates have impact on GDP. Since oil is the major import of Pakistan and every year we spend a lot of foreign exchange to purchase this basic necessity so that for government there are two policy recommendations. First…