Refer to the information provided in Figure 26.3 below to answer the question(s) that follow. Figure 26.3 -Refer to Figure 26.3. The increased use of hydraulic fracturing, or fracking, in North Texas has significantly reduced energy prices across the country. This fracking would cause A) the short-run aggregate supply curve to shift from AS₁ to AS₂. B) the short-run aggregate supply curve to shift from AS₁ to AS₀. C) the economy to move from Point B to Point A along AS₁. D) the economy to move from Point C to Point B along AS₁.

Question

Quizplus · Accepted Answer

Fracking would increase the supply of energy, which would lead to a shift in the short-run aggregate supply curve to the right. This would cause the curve to shift from AS₁ to AS₀, resulting in lower energy prices and a higher level of output. Therefore, the correct answer is B.

Refer to the Information Provided in Figure 26