This link explains it very well.
http://www.physlink.com/education/AskExperts/ae221.cfm
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The design of rockets has certainly changed over time. Rockets now are designed to be sleek and very efficient on fuel.
In Rockets.
When they are launched.
In jets, speed boats, rockets, some helicopters
No. Jet engines draw oxygen from the atmosphere to mix and burn with jet fuel, and cannot function in a vacuum. Rockets carry their own oxygen, and can travel in the vacuum of space.