Gas Price Effect on the Economy Economy is defined by dictionary as a Careful, thrifty management of resources, such as money, materials, or labor. It is a system or range of economic activity in a country, region, or community (Definition of Economy, 2009)…
Some develops faster and stronger than the others. Other factors can also be influence by the policies of the government, industry, technology, raw materials, and environment. The prosperity of the economy rises and falls with these factors, and one of these factors is through the industry of gas. When we talk about gas, it is inseparable with oil industry. Oil and gas industry is considered to be one that holds a stronghold in the world and America’s economy today. Oil and gas industry greatly affects the economy. The economy receives an improvement when there are large reserves and an increase of active drills in respect to oil and gas. People are able to consume more if the price of gas and oil falls. According to Perner (2008), the current gasoline prices are likely to have a large impact on consumer spending but a much smaller impact on the amount of gasoline purchased. Instead, the effect is likely to be felt in other areas of spending such as vacations, entertainment, electronics or eating out. Barbara Hagenbaugh (2007) stated in her report that economists believe that rising gas prices hurt but its impact is fairly limited. ...
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Greenhouse gas emissions and price elasticity of transport fuel demand in Belgium. In the article, “Greenhouse gas emissions and price elasticities of transport fuel demand in Belgium” the price elasticity of demand for fuel plays a significant role in analyzing the reduction of greenhouse gas emission from Belgium transport sector through intervention by the Belgian government.
During the course of this research, the following takeaways are expected to be obtained: (1) understanding of consumer behavior in relation to incremental price changes in selected models of Toyota; (2) determining the extent of impact that price movement has on car owners and potential car buyers; (3) improving future price strategies.
A study suggests that every $0.25 increase in gas prices leads to a removal of $25 billion from the US economy.(Micheal Kopley, 2011). Higher gas price means that individuals have less money to spend on other goods. The decline in demand for goods translates into loss of jobs.
Conclusion VII. Bibliography Introduction The gas industry has a substantial impact on the UK economy. This is because the United Kingdom is a large consumer of gas in several ways with many of its energy demand pegged on gas. The supply of gas, however, remains an immense challenge to the country.
In a world which is largely powered by coal and petroleum, the Energy Information Administration believes that there will be an increase of natural gas production to 28 trillion cubic feet per year as the price of crude oil increases (Loveless, 2012). There are several reasons for this move and there are a number of benefits that the United States can obtain from a proposed dependency on natural gas.
This fact is evident in Price hike which is observed between the years 2004-05. (How Gas Prices Work) It is to be stressed that the industrialized world survives basically on gasoline which is the blood line fluid in determining the economy of a country. The consumption of gasoline by the United States alone for a year is around 130 billion gallons which is almost 500 billion liters.
Some researchers found out that it will be positive to the economic growth rate of the oil producing countries and be negative to the oil using countries. Why it can work as parameter to predict many economic phenomena? The key point is from the externalities.
For instance, nations such as Kazakhstan, Kuwait and Qatar earn about 60 to 70 % of total governmental revenue from their respective oil and gas industry (Central Intelligence Agency, “The World Factbook”; The Report: Qatar
The big question is how these changes in the prices of oil are forecasted in the market. The demand and supply framework in the market show the players to buy or sell at each given price. Equilibrium is achieved in the market if its demand is equal to its supply. The oil price at the market equilibrium is the market price of oil at that given time.
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