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The present paper deals with the movements in the gasoline prices in USA – more specifically, the causes and the effects of the gasoline price movements. The fluctuations are found to be very high in this case and so are the effects of these deviations. The impact can be as…
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Case Study #2
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Download file to see previous pages Gasoline is most commonly used as a fuel in vehicles which makes it one of the most important commodities in human life today. One of the characteristics of a necessary item is that its price should stay within the affordable limits of the general public, so that they are not deprived from its usage under any circumstances. But, gasoline price is found not to adhere to this rule and had often been subjected to wide variations, a consequence of similar variations in oil prices. The impact of such price movements is more intensely felt in the Western economies where almost every household owns a car. The following diagram is evidence of the wide fluctuations in gasoline prices in USA over five years (2004-2008).
In fact, the mean and standard deviations of the gasoline prices, which are 251.38 (cents per gallon) and 62.15, over the five year span being considered, are also evident of wide variations in the same.
The present study tries to investigate the causes and effects of wide fluctuations in gasoline prices in context of the US economy. USA being one of the highest GDP earning nation in the world and also the one with the highest per capita income, is a good ground for the study since oil has become more like a mode of daily life for the Americans. Hence, any fluctuations in the price level of the same, will have a widespread impact on the lifestyle of the nationals. The research outcome will help the residents of the country to get more aware of the possible impact of a rising oil price and thus they will be in a position to anticipate beforehand how they might be affected when subjected to such price fluctuations, and thus shield themselves accordingly.
The fluctuations in oil prices and hence that of gasoline could be owed to a large proportion of oil being produced in the Middle East nations which, having formed an organization in themselves (OPEC) enjoy almost a monopoly power over the price movements of the ...Download file to see next pagesRead More
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