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I have a super big car (59 Edsel) with a ford 2.3 turbo and a 5 speed. Even fully loaded with family, fuel, and luggage it climbs the steepest of highway hills with ease. It probably has only 150HP since I have not added an intercooler yet. It will be getting an intercooler and other mods very soon.
If you are looking for fuel economy then the carbed 350V8 is probably overkill for displacement and will never get that good of mileage. Strangely enough when I tell people that I can get 24mpg they will sometimes tell a story of some car they had in the good ol' days that had a 454 big block getting 25mpg because the big engine supposedly did not have to work hard. I suspect the people getting this good of economy from a V8 were not keeping actual fuel logs. I say go with 4 cylinder power if you can and do those aero mods too!
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