Week 6 — Gap Report: How Far From Normal, and Who Calls a Recession?

Assignment 6 of the term — measure two output gaps, explain what each one means, and tell a neighbor how a recession is really dated.

This adaptive assignment uses a coaching dialogue to help you turn a first attempt into a clear, checkable 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. In Week 3 you met cyclical unemployment, in Week 4 you met potential output, and in Week 5 you built the AD–AS diagram; this week you put all three together to measure how far an economy sits from normal. This week's lecture tutorial, quiz, discussion, and Model Workshop practice the same ideas from other angles; this assignment is where you put them together and explain them.

The task

This report uses the week's illustrative output-gap economy, constructed for this course and not real data: potential output of 1,000 billion dollars, actual output of 950 billion dollars in a recession year, and actual output of 1,040 billion dollars in a boom year.

Work these four problems, showing every step on its own line:

1. In the illustrative output-gap economy, potential output is 1,000 billion dollars and actual output is 950 billion dollars. What is the recessionary gap, in billions of dollars?
2. In the same recession case, with potential output of 1,000 billion dollars and actual output of 950 billion dollars, what is the recessionary gap as a percentage of potential output?
3. In a boom year, the illustrative output-gap economy has potential output of 1,000 billion dollars and actual output of 1,040 billion dollars. What is the inflationary gap, in billions of dollars?
4. In the same boom year, with potential output of 1,000 billion dollars and actual output of 1,040 billion dollars, what is the inflationary gap as a percentage of potential output?

Beside each figure, add one brief interpretation in plain words. For problem 1, say what the gap means for the economy's workers and machines, and what it means for unemployment, naming cyclical unemployment. For problem 2, say what a gap of that share of potential output means; your message for the neighbor below is the second part of problem 2. For problem 3, say what the gap means for workers, machines, and prices, and which side of the vertical long-run aggregate supply line the crossing sits on. For problem 4, say what a gap of that share means, and which curve shifts as the economy self-corrects with no new policy, in which direction, and what happens to the price level.

Explain it to a non-expert

A neighbor who drives for a delivery service hears a radio host say, "Two quarters of shrinking GDP in a row means we are officially in a recession," and asks you whether that is how it works. Write a 3–5 sentence message your neighbor could follow: how U.S. recessions are actually dated, what a recessionary gap would mean for someone whose hours depend on the economy, and one honest limit, such as how late official dates arrive or the fact that potential output has to be estimated. Explain any technical term in everyday words. More than one good limit can be defended.

For a different, ungraded example, imagine a friend who coaches a youth soccer team and hears that "two losses in a row means a team is officially in a slump." Model message: "Two losses in a row is an easy thing to notice, but it is not how the league decides a team is struggling. The league looks at how badly the team is losing, how many parts of its game are slipping, and how long the trouble lasts. A team can lose twice to strong opponents and still be playing well. The catch is that this careful kind of judgment takes time, so the verdict comes after the season has moved on."

Use that pattern for the radio host's claim, with your own explanation.

Here is one honest note about scope: every number in this assignment is illustrative, so do not add a real GDP figure or a real recession date from the news. The same reasoning, though, is what lets you read the next recession headline with a clear head.

Part 1 — Student instructions

1. Draft all four figures, the four brief interpretations, and your message for the neighbor 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 right.
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 report for you.

Coach Prompt

COPY EVERYTHING BELOW THIS LINE
ROLE: You are a careful learning coach. Draw out and challenge MY thinking about output gaps: recessionary and inflationary gaps in billions of dollars and as a percentage of potential output, cyclical unemployment, the vertical long-run aggregate supply line, self-correction through short-run aggregate supply, and how U.S. recessions are dated. Do not write my assignment for me and do not invent work I did not show.

ASSIGNMENT: Work through these four problems in order, one at a time. Do not invent, replace, or reorder a problem. Every number is illustrative, constructed for my course, not real data. The data: potential output is 1,000 billion dollars; actual output is 950 billion dollars in a recession year and 1,040 billion dollars in a boom year.
PROBLEM P1: In the illustrative output-gap economy, potential output is 1,000 billion dollars and actual output is 950 billion dollars. What is the recessionary gap, in billions of dollars?
PROBLEM P2: In the same recession case, with potential output of 1,000 billion dollars and actual output of 950 billion dollars, what is the recessionary gap as a percentage of potential output?
PROBLEM P3: In a boom year, the illustrative output-gap economy has potential output of 1,000 billion dollars and actual output of 1,040 billion dollars. What is the inflationary gap, in billions of dollars?
PROBLEM P4: In the same boom year, with potential output of 1,000 billion dollars and actual output of 1,040 billion dollars, what is the inflationary gap as a percentage of potential output?
After the four figures, I must briefly interpret each one: for P1, what the gap means for workers and machines and what it means for unemployment, naming cyclical unemployment; for P2, what a gap of that share of potential output means, with my message for the neighbor as the second part; for P3, what the gap means for workers, machines, and prices and which side of the vertical long-run aggregate supply line the crossing sits on; for P4, what a gap of that share means and which curve shifts during self-correction, in which direction, and what happens to the price level. I must also write a 3-5 sentence message for a neighbor who drives for a delivery service, explaining how U.S. recessions are actually dated, what a recessionary gap would mean for someone whose hours depend on the economy, and one honest limit.

SCORING CRITERIA: Score only evidence I supply: correct gap computations (40 points), reasoning about gaps, self-correction, and recession dating (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 message for the neighbor only with P2.
COMPUTATION UNITS: A correct recessionary or inflationary gap, in billions of dollars or as a percentage of potential output = 2; the right values and operation with only an arithmetic slip = 1; a missing figure or the wrong values or operation, such as subtracting in the wrong direction or dividing by actual output instead of potential output, = 0. Do not penalize an alternative valid method or equivalent notation.
REASONING UNITS: For each problem, an accurate account of what the figure means plus the second required part = 2; exactly one of the two = 1; neither = 0. The second parts: P1, what the gap means for unemployment, naming cyclical unemployment; P2, a message for the neighbor explaining how U.S. recessions are dated with one honest limit; P3, which side of the vertical long-run aggregate supply line the crossing sits on; P4, which curve shifts during self-correction, in which direction, and what happens to the price level. 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 message for the neighbor with P2. 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 figure 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 reply. 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. Never bring in a real-world GDP figure or recession date.

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 figures and their brief interpretations AND written my message for the neighbor 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 gap report, and the share link.
COPY EVERYTHING ABOVE THIS LINE

Deliverables

Submit these three items in the assignment entry:

• your revised gap report with all four figures, their brief interpretations, and your message for the neighbor — written, or recorded as audio or video with a transcript, or as a labelled sketch of the two crossings and the vertical long-run line with 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 6 skills — computing a recessionary and an inflationary gap in billions of dollars and as a percentage of potential output, reading each gap off the AD–AS diagram, linking a recessionary gap to cyclical unemployment, explaining self-correction through short-run aggregate supply, and explaining how U.S. recessions are dated — 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 for the neighbor. 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 gap report, 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 do not let it supply a real-world GDP figure or recession date. Submit an honest share link from your own dialogue. The equivalent route keeps the same workload and evidence and requires no AI account.

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