Hydraulic fracturing has caused a dramatic reduction in the cost of producing natural gas and petroleum. a.

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Hydraulic fracturing has caused a dramatic reduction in the cost of producing natural gas and petroleum.

a. Briefly explain which industries are likely to be most directly affected by these cost reductions.
b. How will aggregate supply be affected by what happens in these industries as a result of the cost reductions from fracking? Is the effect likely to be greater in the short run or in the long run? Briefly explain.

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Money, Banking, and the Financial System

ISBN: 978-0134524061

3rd edition

Authors: R. Glenn Hubbard, Anthony Patrick O'Brien

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