CAR INDUSTRYSales of big ticket items, in particular the autos,
declined strongly during the current...

Question

CAR INDUSTRYSales of big ticket items, in particular the autos,
declined strongly during the current recession and the market share of the
domestic auto manufacturers went down over years. The cash-for-clunkers program
in 2009 was implemented to help the domestic production of cars. The following
questions could be used as guidelines for your research paper:
? The cash-for-clunkers
program: objectives and results. Did the car companies ripped the benefits

of the program?
? The competition between the
Big 3 and the Asian car manufacturers (Toyota, Nissan, Honda,

Hyundai). Is improving fuel
efficiency, car design and customer service key to winning more of the domestic
market for the Big 3?
? Toyota?s recent recalls and its effect on the market share
and brand image. Who are the winnersand losers as a result of Toyota?s recalls?
Requirements: 
1. The essay should emphasize quality rather than quantity,
and its structure should contain 3 sections: Introduction, Economic Analysis
and Conclusion.a) The introduction should be just 1-2 paragraphs long. It should set the relevance
of the topic and finish with the main question or questions you want to answer
in this paper.The introduction must also state your main argument, idea or
hypothesis of your paper.b)The Economic Analysis section should be 2-4 pages long. In this section you
should present the empirical evidence and with the help of some microeconomic
tools, you should explain rationally what happens in reality. Include terms
like demand, supply, variable and fixed costs, marginal or incremental changes,
marginal and average costs, price elasticity, income elasticity, maximization,
minimization, normal profit, competitive markets, product differentiation,
market structure, oligopoly, and other relevant terms.c) Finally, the conclusion has to be directly related to the introduction. The
conclusion should also be just 1- 2 paragraphs long, and it should answer the
questions set in the introduction. Be sure there is a strong connection between
the introduction and the conclusion. You can also expand on the implications of
your answer and predict something about the future.

David · Accepted Answer

INTRODUCTION:
The cfc or the official -Car Allowance Rebate System (CARS) was introduced in 2009 in a bid to help the automobile companies, that were struggling with a sales slump. This slump was part of the recession that hit USA in 2008.  Cash for clunkers was a part of the economic stimulus package. On June 24,2009, CARS Act of 2009 was signed into law.  The big question is about the impact of the program on automobiles production, employment and the short and long run efficacy of the program. 
ECONOMIC ANALYSIS
The efficacy of any program depends on the achievement of the stated objectives and the costs associated with it. The  Congress allocated $1billion for this program, with an additional $2 billion allotted later in August. The popularity of the program is judged from the fact that it ran out of funds and was ended on August 24. In total, more than 677,000 vehicles received 
financing, and $2.8 billion was distributed through this program. 
Experts have examined the effects in many ways. First, we look at the primary effect on production.  Since auto purchases are big-ticket items the recession had caused demand to decline, which adversely affected the auto sector. Experts point at the success of the program in increasing production; ‘We find that the program induced the purchase of an additional 370,000 cars in July and August of 2009.’ This is clearly visible in the chart below.

CAR INDUSTRYSales of big ticket items, in particular the autos, declined strongly during the current recession and the market share of the domestic auto manufacturers went down over years. The...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment