Question

Hydraulic fracturing (fracking) has the potential to significantly increase the amount of natural gas produced in...

Hydraulic fracturing (fracking) has the potential to significantly increase the amount of natural gas produced in the United States. According to the AD/AS model, in the Short-Run,

      -       A.       B.       C.   

GDP

      -       A.       B.       C.   

Price level

      -       A.       B.       C.   

Employment

A.

will increase

B.

will not change

C.

will decrease

Homework Answers

Answer #1

Ans.

GDP ---------------------- A.will increase as the quantity will increase and will be closer to LRAS which is dipicted as a vertical lne.

Price Level ------------- C.will decrease because the supply will shift right ward , making price to decrease and quantity to increase.

Employment ------------ A. will increase as the short run supply curve will right , because higher output is required.

--------------------------------------------------------------

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1.Natural Gas: Fracking technology is improved allowing easier access to natural gas reserves. A. "Change D,...
1.Natural Gas: Fracking technology is improved allowing easier access to natural gas reserves. A. "Change D, Increase P, Increase Q" B. "Change D, Decrease P, Decrease Q" C. "Change Quantity Demanded, Increase P, Decrease Q" D. "Change Quantity Demanded, Decrease P, Increase Q" 2.Rice: Reports surface about traces of arsenic (a poison) in rice. A."Change D, Increase P, Increase Q" B. "Change D, Decrease P, Decrease Q" C. "Change Quantity Demanded, Increase P, Decrease Q" D. "Change Quantity Demanded, Decrease...
Factors that could cause the SRAS curve to shift are a. Fiscal policy b. Productivity increase...
Factors that could cause the SRAS curve to shift are a. Fiscal policy b. Productivity increase c. Consumer confidence d. Oil price increase QUESTION 2 Which of the following would shift the AS curve? a. The level of government spending b. Incentives to install a new technology c. An increase in labor productivity d. The costs of the factors of production QUESTION 3 Households decide to save a larger portion of their income. According to the AD/AS model this change...
According to the simple Keynesian model, increases in AD that occur at Potential GDP will have...
According to the simple Keynesian model, increases in AD that occur at Potential GDP will have what impact on price level? a. Increase price level. b. Decrease price level. c. Not enough information. d. Have no impact on price level.
Imagine that in the year 2025, China’s economy increases significantly, causing an increase in demand for...
Imagine that in the year 2025, China’s economy increases significantly, causing an increase in demand for U.S. exports. Use the ADAS model to explain the likely short run impacts on U.S. GDP and the aggregate price level. What do you anticipate to happen to U.S. consumption expenditures and U.S. employment? Explain your reasoning for each of your predictions and show graphically as appropriate.
Describe whether the following changes cause the aggregate demand curve to increase (shift right), decrease (shift...
Describe whether the following changes cause the aggregate demand curve to increase (shift right), decrease (shift left), or neither. (a) The price level increases. (b) Investment decreases. (c) Imports decrease and exports increase. (d) The price level decreases. (e) Consumption increases. (f) Government purchases decrease. Describe whether the following changes cause the long-run aggregate supply curve to increase (shift right), decrease (shift left), or neither. (a) The price level increases. (b) The stock of capital in the economy increases. (c)...
Question 1 (1 point) Which of the following would shift aggregate demand to the right? Question...
Question 1 (1 point) Which of the following would shift aggregate demand to the right? Question 1 options: Increased technological knowledge An increase in net exports An increase in the interest rate Greater availability of natural resources Question 2 (1 point) Which of the following would shift the current long-run aggregate supply curve to the left? Question 2 options: A decrease in employment Increased net exports More capital Reduced investment spending Question 3 (1 point) According to classical economics, in...
In the basic​ AD-AS model, an increase in the aggregate demand curve would in the long...
In the basic​ AD-AS model, an increase in the aggregate demand curve would in the long run lead to​ ________ in real GDP and​ ________ in the price level. A. an​ increase; an increase B. no​ change; no change C. an​ increase; no change D. no​ change; an increase
Favorable weather    a.    would cause the AS curve to shift leftward, thereby increasing both...
Favorable weather    a.    would cause the AS curve to shift leftward, thereby increasing both output and the price level    b.    would increase firms’ unit costs    c.    is an example of a negative supply shock    d.    is an example of a positive demand shock    e.    would lead to an increase in output and a decrease in the price level A negative supply shock    a.    decreases real GDP and increases...
Assume the economy is at a full-employment equilibrium. Now, if due to the pandemic, government increases...
Assume the economy is at a full-employment equilibrium. Now, if due to the pandemic, government increases spending to fight the virus, would this, ceteris paribus, be reflected as a change in aggregate demand or a change in aggregate supply? Explain. Be sure to clearly identify a textbook factor of AD or AS that is causing this change. Would this change be an increase or decrease? Explain.  Would this change result in the economy moving to a short-run below, or above, full-employment...
3. There is an increase in the wages in Canada, which causes an increase in cost...
3. There is an increase in the wages in Canada, which causes an increase in cost of production by firms in the country. a. Use the AS/AD model to demonstrate the short-run impact of this event on the aggregate demand (AD) curve, the short-run Aggregate Supply curve (AS), real GDP, price level and unemployment. Your answer should include:                             i. An AS/AD graph with all curves and quantities clearly labeled. For curves and quantities that change, label their old values...