Chevron signs $73b gas deal Gorgon, Chevron's huge liquefied natural gas project, is finally going forward. The company, along with Exxon Mobil and Shell will produce natural gas off the northwest coast of Australia. Gorgon and surrounding fields hold an estimated 40 trillion cubic feet of natural gas, the equivalent of 6.7 billion barrels of oil. Gorgon is located for easy shipment to Asia and will employ 10,000 workers. Source: Radio Australia, September 10, 2009 Explain how this huge project will influence Australia's potential GDP and U.S. potential GDP.

Australia - Shift Australia's production function upward, create a movement up along the production function as the full-employment quantity of labor increases, and increase potential GDP

United States - Will not change potential GDP as production happens in Australia

Explanation:

Australia's production potential will rise which will be depicted by a shift upwards in the Production Possibilities Frontier (PPF) thereby leading to an increase in the full employment quality of labor and potential GDP for Australia.

As the production is happening in Australia, it will not affect potential GDP in the US.