Use AD/AS model to solve the following problem. You are expected to: 1. DRAW and explain with AD/AS model.Hydraulic fracturing (fracking) has the potential to significantly increase the amount of natural gas produced in the United States. Assume a large percentage of factories and utility companies use natural gas. In the following two scenarios, what will happen to output, the price level, and employment as fracking becomes more widely used? Scenario A: the economy is operating at full employment level of ouptput. Scenario B: The economy is operating below full employment.

Use AD/AS model to solve the following problem. You are expected to: 1. DRAW and explain with AD/AS model.Hydraulic fracturing (fracking) has the potential to significantly increase the amount of natural gas produced in the United States. Assume a large percentage of factories and utility companies use natural gas. In the following two scenarios, what will happen to output, the price level, and employment as fracking becomes more widely used? Scenario A: the economy is operating at full employment level of ouptput. Scenario B: The economy is operating below full employment.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Use AD/AS model to solve the following problems. You have to DRAW and explain AD/AS model. Hydraulic fracturing ( fracking) has the potential to significantly increase the amount of natural gas produced in the United States. Assume a large percentage of factories and utility companies use natural gas. Scenario A: the economy is operating at full employment level of output. Scenario B: The economy is operating below full employment. what will happen to output, the price level, and employment as fracking becomes more widely used? LO1: Analyze the dynamic economic environment using economic notions and theories. LO2: Explain consumer and producer behavior and economic decision-making of economic units under different market structures. LO3: Describe and interpret measures of macroeconomic performance including potential efficiencies, government actions, and market forces.
Using the AD-AS model, which of the following statement better describe what has happened with the pandemic? a. The government discouraged people from engaging in economic activities, which shifted the AD curve left; meanwhile, the government forced the closure of most of the firms in the economy, which shifted the short-run AS curve left, leading to much lower production in the overall economy. b. The government discouraged people from engaging in economic activities, which shifted the AD curve left; meanwhile, the government forced the closure of most of the firms in the economy, which shifted the short-run AS curve left, leading to a lower natural rate of output in the overall economy. c. The government discouraged people from participating in economic activities, which shifted the AD curve right, causing a higher price level for the firm to produce more goods and services. Hence, the short-run aggregate supply shifts to the left, leading to much lower…
In 2020, the COVID-19 struck and disrupted the world. As a result of this virus, we saw a decrease in Aggregate Demand, which lead to our production to nearly halt in several industries. For this discussion, your task is to: Think about some industry or type of firm that you have knowledge about and explain how that industry has been affected by COVID-19. Then explain how this impact could demonstrated in our AD/AS model.
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Between 2007 and 2009, the United States experienced a severe financial crisis and economic downturn commonly known as the Great Recession. Starting in 2006, housing values fell 30%, causing losses in mortgage-backed securities for families and financial institutions. The recession was marked by a drop in aggregate demand that caused a decline in GDP and an increase in unemployment. QUESTIONS How did the AD/AS equilibrium change over time? Support your claims by referring to your AD/AS model. Select an economic factor (GDP, unemployment, price level) and explain what impact any shifts in AD or AS (or both) had on your chosen factor.
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