Refer to the information provided in Figure 11.3 below to answer the questions that follow. Figure 11.3 -Refer to Figure 11.3. 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

The increased use of fracking has increased the supply of energy, which would shift the short-run aggregate supply curve to the right from AS₁ to AS₀, indicating an increase in output and a decrease in prices. Therefore, option B is the correct choice.

Refer to the Information Provided in Figure 11