Week 5 Project Paper 2 –Macroeconomic Analysis
Course: ECON545 - Business Economics
Instructor: Professor Michael Peterson
Date: November 26th, 2015
Often people think the price of oil is the main determinate of the price of gasoline, but the factors that affect gas prices are a touch more complex than the numbers suggest. To learn how gas prices are set, it is necessary to study supply, demand, inflation and taxes. Although supply and demand take the most focus and the most charge for the high price of gasoline, inflation and taxes too involve in large rises in the charges to consumers.
Figure 1: Components of gasoline price (Econlife Website)
Incited by my cousin Edgar, who needs to know if acquiring two gas stations is an intelligent business decision, I’ve presented this economic analysis regarding the impact of macroeconomic variables GDP Growth Rate, Business Cycles, Fiscal policy and level of unemployment, Monetary policy and interest rates, International trade and Demographics.
2) GDP growth rate
We all know that the gasoline prices have been raising with time because there is high consumption of fuel in U.S. this is making a twisted situation in country which is affecting all business in country. This twisted situation of Federal Reserve has set low interest rates and another most significant is sub-prime loans. The money is being spent excessively with a thought of using excess gas then to go on vacations and do shopping. According to the latest GDP in U.S; the figure was $16.24 trillion in 2010. The general population of United States was 328.9 million in 2011. The GNI per capital in U.S in 2012 was $52,340 and it has been rising thereafter. Therefore, according to World Bank Data base (2014) “it shows that the country is coming out of the 2008 crisis leaving a positive impact on the growth of business units in U.S”. (Scott Barber, 2012)