Week 5 Discussion — Demand Story or Supply Story? — Traditional alternative (no AI)
Instructors: publish this instead of the adaptive version if you prefer, and unpublish or delete the adaptive one.
Hook
Prices across an economy can rise for two very different reasons. Buyers may be spending more, or firms may be facing higher costs, and this week's AD–AS model says the two stories leave different fingerprints on real output.
Your discussion question — choose Option A or Option B; they carry the same weight and the same rubric, and you say which you picked.
Option A: Pick a stretch of rising prices you have noticed or read about across the economy (groceries, rent, gas, travel, or prices in general). Argue whether it is better read as a shift of aggregate demand or a shift of short-run aggregate supply. Name the shifter you think moved, the direction, and what the model then predicts for the price level and real output. Say what evidence would tell the two stories apart, and make the strongest case for the reading you did not choose.
Option B: Short-run aggregate supply slopes up because some prices and wages are sticky. Think of a workplace, a lease, a menu, or a price you know well. Argue whether prices and wages there are sticky or flexible, and what that implies for how output responds when the economy-wide price level rises. Then make the strongest case for the opposite view, using a different part of the economy you know.
There is no single right answer. Economists who share the same model still disagree about which curve moved in a given season and about how sticky prices really are; both are questions about evidence. Pick the option you actually care about, and make your case.
Expectations
Activity format: one initial post followed by two substantive peer replies. Plan on about 45 minutes across the two deadlines; your instructor sets both due dates in Canvas.
Your initial post — by the first due date (early in the module week):
- Say which option you chose.
- For Option A, describe the stretch of rising prices, name the shifter you think moved, the curve and the direction, and say what the model predicts for the price level and real output; for Option B, describe the workplace, lease, menu, or price, say whether it is sticky or flexible and why, and connect that to the slope of short-run aggregate supply.
- Use at least two of this week's terms (aggregate demand, short-run aggregate supply, sticky prices and wages, movement along a curve, shift of a curve) correctly.
- State the strongest case for a reading you do not hold, in one or two sentences, and name the evidence that would separate the two readings.
- Length: roughly 150–250 words if written. You may instead record your post as audio or video (about two minutes) and attach a transcript; both forms are scored by the same rubric.
Your replies — by the second due date (the end of the module week):
- Reply substantively to at least two classmates.
- A substantive reply does more than agree: point to a price-level change the poster drew as a shift, name a shifter they left out, or make the strongest fair case for the curve they did not choose. "Nice point!" on its own does not count.
What a strong post looks like:
I chose Option A. When fuel and shipping got more expensive, store prices rose while some factories near me cut shifts. I read that as short-run aggregate supply shifting left: input costs rose, so the price level went up and real output went down. If buyers' spending had driven it instead, output would have risen with prices. The best case for a demand story is that spending also picked up that season, so both curves may have moved; I would check whether total output actually fell.
Notice how it names the shifter, the curve, and the direction, says what happens to the price level and real output, and states a fair case for the other reading. That is the bar.
Participation rubric
This discussion is worth 10 points. The three criteria below look at your initial post and your peer replies.
| Criterion | Full credit | Partial credit | No credit |
|---|---|---|---|
| Quality of the initial post (4 pts) | A specific case with a named shifter or a clear sticky-or-flexible judgment, the curve and direction named, the predicted price level and real output stated, and a fair statement of another reading | A case is present, but the shifter, the curve, or the direction is vague, or the position is asserted without a reason | Missing, off-topic, or no reasoning about the case |
| Use of course concepts (3 pts) | Uses aggregate demand, short-run aggregate supply, sticky prices and wages, and movement along versus shift precisely, with every label applied correctly | Uses a term loosely, or draws one price-level change as a shift | No course terms, or used incorrectly |
| Engagement with peers (3 pts) | Two or more substantive replies that extend or challenge a classmate's reasoning | One substantive reply, or replies that only agree | No replies, or "I agree" with nothing added |
Post early if you can — the best threads happen when people have time to reply before the second due date.
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