ECO 561 Course Great Wisdom / tutorialrank.com ECO 561 Course Great Wisdom / tutorialrank.com | Page 22

Examine the influence of gasoline prices on the choice of vehicle you
selected. Gasoline prices rise and fall dramatically based on economic
supply of and demand for crude oil. When gasoline prices are low,
Americans buy larger, heavier autos, SUV's and pick-up trucks. When
gas prices are high, Americans purchase more compact and fuel
efficient vehicles. When you purchased your last vehicle, were crude
oil and gasoline prices rising or falling?
Discuss the following in regard to your household at the time of your
purchase:
Were you employed?
Was the economy growing or contracting (recession)?
If you were employed, did you take into consideration the risk that
you might lose your job if a recession occurred during the period of
your loan pay-back?
A basic assumption of consumers making purchases of large items
requiring financing is that their household cash flow will be adequate
to cover the monthly loan payments. For most Americans, this also
means assuming continuation of their present wages. But many jobs
are sensitive to rises and falls in the business cycle, as witnessed by
the 10% unemployment rate of the past "Great Recession."
Evaluate the financial trade-offs made when making your purchase.
This includes lower maintenance costs for a newer vehicle versus a
car payment and higher insurance among other factors.
Discuss the influence of any of these Federal or state level programs
on your decision to purchase a vehicle; or if these did not factor into
your decision, explain why or why not:
Buying fuel efficient vehicles such as Flex fuel, hybrids and electrics