In the Diagrams Below, the Subscript "1" Refers to the Initial

question 12

Multiple Choice

In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the final position after the curve shifts. Which diagram illustrates the effect on the natural-gas market of the widespread use of "fracking," or hydraulic fracturing, by gas-drilling companies?

• A) A
• B) B
• C) C
• D) D

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Definitions:

Inflation

A general increase in prices and fall in the purchasing value of money.

Disposable Income

The amount of money individuals have available to spend and save after taxes have been deducted from their income.

Economize

The action of reducing expenditure or efficiently managing resources to avoid waste and save money.

Foreclose

The legal process by which a lender takes control of a property from a borrower due to failure to meet the repayment terms of a loan.