National Average of Gas Prices 2000-2001
ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ In the beginning of the summer, when most people drive to vacation spots throughout the United States, gas prices reached record highs. In June 2000, the national average was $1.68 per gallon and in some larger cities; the prices soared to $2.00 and more per gallon (Facts.com, 2005). Americans were furious not only because consumers were paying more at the pumps, but because rising fuel costs have triggered inflation. Americans realized that if inflation began to rise, a recession could be triggered as had occurred in the 1970's and 1980's (Facts.com, 2005).
Affects on Gas Costs on the Economy 2000-2001
ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ ÃÂÃ Fuel prices began to rise because the supply of oil was not meeting the ever-increasing demand for fuel. The Organization of Petroleum Exporting Countries (OPEC), a group of nations that determines what the guidelines for world fuel exports should be, lowered the production quotas in 1999, even though the demand for oil was rising around the world ((Facts.com,
2005). During this time, in the United States, the demand for oil was increasing due to the strong economy. Asia's economy was also rebounding from an economic crash in 1997 (Facts.com, 2005). These two factors allowed more consumers to travel further distances in larger cars. Consumers began to feel more confident in the economy and were not so money conscious. Instead of the small, fuel-efficient cars, consumers began to buy sport-utility vehicles (SUVs) that required large quantities of gas. Gas prices were a dollar lower in 2000 than they were in 1987 (Facts.com, 2005). Gas costs were lower per gallon than Coca-Cola, milk, and orange juice and significantly lower than olive oil and eye drops (Facts.com, 2005). Consumers would use this reasoning to justify purchases of the fuel hungry SUVs. Americans were encouraged by the government...