Question

The affects of lowering and hiring gas price ·

· Do you agree or disagree with the decisions /opinions of the government right now ? Why?

Answer 1

Affects of lowering and hiring gas prices:

Gas prices have taken center stage as the national average for a gallon of gasoline has topped by few dollars. At the individual level, higher gas prices mean that each of us will pay more at the gas pump, leaving less to spend on other goods and services. But higher gas prices affect more than just the cost to fill up at the gas station; higher gas prices have an effect on the broader economy  

When gas prices go up , people have only a limited ability to significantly change how much gasoline they consume. Because they have the car they have, they live where they do, they work where they do, so they might be able to cut back on discretionary travel a little bit, but probably the biggest factor is changes in other expenditures.So where you tend to see a decline in other expenditures are things like meals eaten outside the home, where people can on a pretty rapid basis change their consumption patterns of discretionary spending.

Lower gas prices generally translate to higher consumer sentiment, which means people feel good about the economy and generally will spend more. In fact, in 2015 it was estimated that consumers spent 80 cents of every dollar saved on gas on personal consumption, according to a JPMorgan Chase report.

Rising gas prices also make consumers think that future inflation is likely to be worse than it might otherwise be, another reason they become gloomy and rein in spending. That's not always rational, because people tend to take less notice of things that are getting less expensive and easing the strains on their budget, such as anything with a microprocessor. But rational or not, the psychological effect of costly gas can be powerful. Changes in consumer behavior can take the sting out of rising gas prices and help keep confidence buoyant. People try to drive less when gas costs more, but the bigger effects are the ones that occur over longer periods of time, such as buying a more efficient car or moving to reduce the expense of commuting.

If gas prices are high and are expected to stay high, you are going to see more fuel efficient overall vehicles.On the other hand low gas prices have caused annual inflation to slow. The prices of various consumer goods have remained stagnant over the past month and this has forced the annual inflation rate to remain the same. low gas prices have caused annual inflation to slow. The prices of various consumer goods have remained stagnant over the past month and this has forced the annual inflation to remain the same.This downfall could be contributed to a mismanaged state-run oil company.

Now regarding the opinion/decisions of government ,in the short-term, the government can help people who can’t afford higher heating bills. The Low Income Household Energy Assistance Program (LIHEAP) — a federal program administered by county governments and local community organizations — can help. But funding for the program hasn’t kept up with oil prices — which have doubled in the past two years. That means either more money has to be added to the program — or else some people are going to go without heat this winter.

Over the longer term, there are really only two things the government can do to help contain oil prices, and the cost of the fuels made from oil. First, it can encourage oil companies to produce more oil. The second thing it can do is to promote more efficiency and cut the growth in demand.

According to the Trade commission, Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors that raises, lowers, or stabilizes prices or competitive terms. Generally, the antitrust laws require that each company establish prices and other terms on its own, without agreeing with a competitor. When consumers make choices about what products and services to buy, they expect that the price has been determined freely on the basis of supply and demand, not by an agreement among competitors. Congress and the Administration should implement policies that open access to domestic resources and eliminate mandates, regulations, and laws that prevent energy markets from working more efficiently.

Disagreeing with the opinion, High prices at the pump driven by market forces are not a compelling reason for the federal government to intervene in energy markets, but they should prompt policymakers to examine government policies that artificially inflate gasoline prices.