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ARTICLE SUMMARY: In June, Congress approved the “Cash for Clunkers” program. The program was so popular that funding ran out within one week and Congress had to approve an extension. Opponents contend, as with the stimulus package, that the Government acted too hastily putting the program in place. The White House countered by arguing the bill was needed to help restructure the automotive industry and to encourage consumers to purchase more fuel-efficient vehicles.

QUESTIONS:

  1. What type of managerial decision does the “Cash for Clunkers” program represent? What factors did you use to make this determination?
  2. Conduct a cost-benefit analysis of the program.
  3. Evaluate the effectiveness of this program. Do you believe Government leaders considered the impact the program would have on the used car market and charities? Why or why not?

SOURCE: D. Gearino, “Used Car Lots, Charities Hurt By ‘Clunkers’,” The Columbus (Ohio) Dispatch (Retrievable online at http://www.dispatch.com for additional reference, see http://usatoday.com)

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