How gas prices affect the economy.

Gas prices can affect the entire economy almost instantly. It can even shut down businesses in under a week. Watch what it does in these two examples.

 

Let’s say gas prices have soared to a record breaking 10 dollars a gallon.

A farmer who produces grain for cows decides that it’s too expensive driving to the farmer who owns the cows. He raises the price of his grain.

The cow farmer sees that the price of grain is too expensive, so he raises the price of his cows.

The meat processor guy realizes that cows are too much money, so he raises the price of the meat.

McDonald’s sees that the price of meat has gone up, so they raise the price of the burgers.

You see that the price of gas has gone up, so you stop going to McDonald’s.

McDonald’s starts losing business, and increases their prices.

You stay at home and cook your own meals.

McDonald’s eventually goes out of business.

Jobs are disappearing.

 

Now, let’s say gas has dropped to 1 cent overnight.

The farmer producing grain realizes that it’s incredibly cheap to drive to the cow farm, so he lowers the price of the grain.

The cow farmer sees that grain is really cheap, so he lowers the price of the cows.

The meat processor lowers his price of meat due to the cows being so cheap.

McDonald’s lowers the price of burgers.

You start traveling more, because gas is cheap. You start eating out more.

McDonald’s gains more business and hires more workers to meet with demand.

More people start traveling more in general, including airplane flights.

More jobs are created.

 

So what I’m saying is that if we want more jobs in the USA, we should find a way to lower gas prices!

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One thought on “How gas prices affect the economy.

  1. An interesting discussion is worth comment. I think that you should write more on this topic, it may possibly not be a taboo topic but generally persons aren’t sufficient to speak on such topics. To the next. Cheers

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