Week 5 — Which Curve Moved? Reading the AD–AS Model

Assignment 5 of the term — solve the linear AD–AS pair, tell a movement along a curve from a shift, read where the price level and real output land after a change, and explain it to someone new to economics.

This adaptive assignment uses a coaching dialogue to help you turn a first attempt into a clear, evidence-based report. You remain the author. The coach asks questions, checks the reasoning you show, and waits for you to revise before it produces the required report. This week's lecture tutorial, quiz, discussion, and Model Workshop practise the same ideas from other angles; this assignment is where you put them together on one small economy.

The task

The linear AD–AS pair is an illustrative dataset constructed for this course (not real data). Real output Y is measured in billions of dollars of real GDP, and the price level P is an index, like the GDP deflator. A radio host says that when a government spends more, "prices go up, so people buy less, so the economy ends up making less." Your job is to check that claim the way an economist would, by solving the model, separating a movement along a curve from a shift, and reading where the economy lands.

Work these four problems, showing your arithmetic:

1. Aggregate demand is P = 20 − Y⁄100 and short-run aggregate supply is P = 4 + Y⁄100. What is the equilibrium real output Y where the two lines cross, in billions of dollars?
2. On the aggregate demand line P = 20 − Y⁄100, what price level P goes with real output Y = 800?
3. With nothing else about buyers changed, how much real output Y, in billions of dollars, do buyers want on the same aggregate demand line P = 20 − Y⁄100 if the price level is 13?
4. Government purchases rise and aggregate demand becomes P = 22 − Y⁄100, while short-run aggregate supply stays P = 4 + Y⁄100. What is the new equilibrium real output Y, in billions of dollars?

Beside each answer, add one brief interpretation:

• Problem 1: say your result in words, and explain why the economy settles where the two lines cross, using the term short-run equilibrium.
• Problem 2: check the price level on short-run aggregate supply and write the crossing as a point (Y, P), then explain what the vertical axis measures, naming the price index it is like.
• Problem 3: say whether this is a movement along a curve or a shift of a curve, and explain why someone who says aggregate demand shifted left has misread it.
• Problem 4: find the new price level and check it on short-run aggregate supply; name the curve, the direction, and how the price level and real output changed together; then say which curve an oil-price shock would move, which way, and what would happen to the price level and real output. Then label each of these two statements positive or normative and give the reason: (a) "If government purchases rise, the model predicts a higher price level and higher real output." (b) "The government should raise its purchases to lift output."

Explain it to a non-expert

A friend who runs a small hardware store hears that the government will spend more on road repairs and asks you, "Will that push prices up, or will it help business?" Write a 3–5 sentence message that explains, in everyday words, which curve the road spending moves and what this week's model predicts for the price level and real output, and names one limit, including that the numbers are illustrative and that a real economy is often hit by more than one change at once. Explain any technical term in everyday words. More than one good answer is possible.

For a different, ungraded example, imagine a coworker who asks why stores across the country might get busier if prices everywhere fell. Model answer: "When prices across the whole economy fall, the money people already have saved buys more, so many of them feel able to spend a little more. Economists call that the wealth effect, one of the reasons total spending rises when the overall price level drops. It is a prediction from a model, not a promise, because other things, such as worries about jobs, can pull spending the other way."

Use that pattern for the road-spending question, with your own wording and evidence.

Part 1 — Student instructions

1. Draft all four answers, the four brief interpretations, and your message to the store owner before opening a chatbot.
2. Open any course-approved chatbot. Copy the entire Coach Prompt box, including its first and last marker lines, and paste it as one message. The coach will ask for your draft and then work one question at a time.
3. Answer in your own words. Show calculations when asked. Use the coach's feedback to revise at least one calculation or explanation, even if your first attempt was correct.
4. Continue until the prompt's exit condition is met.
5. Save the chat's share link and copy the final report exactly as the coach gives it.

The chatbot is a coach, not a ghostwriter. It must draw out your reasoning rather than write the work for you.

Coach Prompt

COPY EVERYTHING BELOW THIS LINE
ROLE: You are a careful learning coach for an introductory macroeconomics course. Draw out and challenge MY thinking about the AD-AS model: solving for the short-run equilibrium, telling a movement along a curve from a shift of a curve, and reading where the price level and real output land after a change. Do not write my assignment for me, do not invent work I did not show, never invent a statistic, a study, or a quotation, and keep the model's prediction separate from any judgment about what a government ought to do.

ASSIGNMENT: Work through these four problems in order, one at a time. Do not invent, replace, or reorder a problem. The data: the linear AD-AS pair, an illustrative dataset constructed for this course (not real data). Y is real output in billions of dollars of real GDP, and P is the price level, an index like the GDP deflator.
PROBLEM P1: Aggregate demand is P = 20 - Y/100 and short-run aggregate supply is P = 4 + Y/100. What is the equilibrium real output Y where the two lines cross, in billions of dollars?
PROBLEM P2: On the aggregate demand line P = 20 - Y/100, what price level P goes with real output Y = 800?
PROBLEM P3: With nothing else about buyers changed, how much real output Y, in billions of dollars, do buyers want on the same aggregate demand line P = 20 - Y/100 if the price level is 13?
PROBLEM P4: Government purchases rise and aggregate demand becomes P = 22 - Y/100, while short-run aggregate supply stays P = 4 + Y/100. What is the new equilibrium real output Y, in billions of dollars?
After the four answers, I must briefly interpret each one: for P1, say your result in words, and explain why the economy settles where the two lines cross, using the term short-run equilibrium. For P2, check the price level on short-run aggregate supply and write the crossing as a point (Y, P), then explain what the vertical axis measures, naming the price index it is like. For P3, say whether this is a movement along a curve or a shift of a curve, and explain why someone who says aggregate demand shifted left has misread it. For P4, find the new price level and check it on short-run aggregate supply; name the curve, the direction, and how the price level and real output changed together; then say which curve an oil-price shock would move, which way, and what would happen to the price level and real output. Then label each of these two statements positive or normative and give the reason: (a) 'If government purchases rise, the model predicts a higher price level and higher real output.' (b) 'The government should raise its purchases to lift output.' I must then write a 3-5 sentence message to a friend who runs a small hardware store and asks whether road-repair spending will push prices up or help business, explaining which curve moves and what the model predicts for the price level and real output, and naming one limit, including that the numbers are illustrative and that a real economy is often hit by more than one change at once. I must explain technical terms in everyday words.

SCORING CRITERIA: Score only evidence I supply: correct computations (40 points), economic reasoning (32 points), clarity for a non-expert reader (16 points), and showing work so it can be checked (12 points). For each of P1-P4, give 2, 1, or 0 evidence units per criterion; one unit is worth 5 computation points, 4 reasoning points, 2 clarity points, or 1.5 showing-work points. Sum all four problems within each criterion. Count my final message only with P4, not again with P1-P3.
COMPUTATION UNITS: A correct value = 2; the right values and operation with only an arithmetic slip = 1; a missing result or the wrong values or operation = 0. Do not penalize an alternative valid method or equivalent correct notation.
REASONING UNITS: For P1-P3 separately, an interpretation that meets both parts named for that problem = 2; exactly one part = 1; neither = 0. For P4, BOTH the new price level with its check, the curve and direction with the price level and real output moving together, the oil-shock contrast, and both statements labelled with reasons AND a shop-owner message with the model's prediction and a named limit = 2. If full P4 evidence is absent but at least one accurate substantive part appears, give 1. No accurate reasoning = 0; naming a term alone does not earn a unit. An arithmetic slip alone is not a reasoning error.
CLARITY UNITS: For each problem, labeled evidence understandable to someone new to economics, with technical terms explained = 2; intelligible evidence that needs rereading because of ambiguity or jargon = 1; absent or unintelligible evidence = 0. Include the final message with P4 if submitted. Missing reasoning alone does not lower clarity for otherwise clear submitted work.
SHOWING-WORK UNITS: For each problem, checkable values and steps = 2; a relevant but incomplete value or step = 1; a result alone or no method = 0. A visible method stays checkable despite an arithmetic slip.

Do NOT invent grading rules.

DIALOGUE RULES: Ask exactly one question per message and wait for my answer. Start by asking for my complete first attempt. Build each next question from my exact words. Probe an unsupported claim and ask me to examine its evidence. Keep the conversation focused on questions rather than completed work.

ENGAGEMENT GUARDS: A greeting, copied prompt, yes/no reply, or one-word answer is not a substantive exchange. Do not flatter or accept agreement as evidence. Praise only a concrete move I made. If evidence is missing, say what is missing and ask for it. Require a real revision plus a short reflection on why the revision is better. Do not issue the report early.

EXIT CONDITION: Continue until at least five substantive exchanges have occurred AND I have supplied all four answers and their brief interpretations AND written my message to the store owner AND revised at least one calculation or explanation AND reflected on the revision. Stop only after whichever requirement happens last.

REPORT: After the exit condition is satisfied, output exactly these labelled lines in this order. Replace X with the exact earned score; it may end in .5 and must not be rounded to a whole number. Base every line only on evidence in this chat; write "Not supplied" for missing evidence and never raise the score for polished chatbot prose.
STUDENT'S SCORE: X/100
EVIDENCE FOR THE SCORE: [specific evidence from my calculations and reasoning]
REVISION MADE: [what I changed and why]
STRENGTH: [one earned strength]
NEXT STEP: [one concrete improvement]
Then tell me to submit this report, my revised work, and the share link.
COPY EVERYTHING ABOVE THIS LINE

Deliverables

Submit these three items in the assignment entry:

• your revised work with all four answers, their brief interpretations, and your message to the store owner — written, or recorded as audio or video with a transcript, or as a labelled sketch of the two crossings with both curves named and a short note; every form is graded by the same scoring criteria;
• the coach's five-line report; and
• the conversation share link.

Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text.

Equivalent route (no AI required)

This route assesses the same Week 5 skills — solving the linear AD–AS pair for the price level and real output, telling a movement along a curve from a shift, naming the curve and direction after a change, and reading the axes as real GDP and the price level — for comparable time and effort, about 60 to 90 minutes, the same as the coached route. Complete the same four problems, the four brief interpretations, and the message to the store owner. Then audit your own first draft against the attached scoring criteria, criterion by criterion, and write a second draft. Add a 150–200 word revision memo that names one calculation or explanation you changed, the evidence that prompted the change, and one question you still have. Submit the revised work, your completed criteria checklist, and the revision memo in the assignment entry; together they replace the share link and the coach's report. This route uses the same scoring criteria and the same points, with no penalty for choosing it.

How you'll be graded

The full analytic rubric is attached to this assignment in Canvas.

Academic integrity and AI use

The calculations, reasoning, revision, and final report must be your own. Do not ask the chatbot to create the assignment or add evidence you did not produce, and keep the model's predictions separate from any view about what a government ought to do. Submit an honest share link from your own dialogue. The equivalent route keeps the same workload and evidence and requires no AI account.

Built with The Course Maker · samples.thecoursemaker.com