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.

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

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