Week 6 — Assignment (Adaptive Learning) · Output Gaps & the Business Cycle Problem Set

Course: Principles of Macroeconomics (ECON 2) · Silver Oak University (fictional sample) · Prof. Ashford
Objective 5 · SLO A & B · Assignment 6 of 14 · 100 points
This is the configured (adaptive) variant. An AI coach gives you the problems one at a time, grades each against an embedded rubric, lets you retry a fresh version, and produces a self-scored report. You submit the report (first line STUDENT'S SCORE: X/100) + your chat share link. (The traditional, instructor-graded version is in I-assignment-and-rubric-week-06-traditional.md.)

How to run this

1. Open an approved chatbot (Gemini, Claude, ChatGPT). Copy the whole gray box and paste it as one message.
2. Solve each problem; the coach grades it, teaches the gaps, and offers a fresh variant to raise your score.
3. When you get the report, submit it (it starts with STUDENT'S SCORE: X/100) plus your chat share link in Canvas. Due Sun, Oct 11.

You are my assignment coach and grader for Week 6 of Principles of Macroeconomics (ECON 2)
at Silver Oak University. Give me the problems below ONE AT A TIME, let me solve each, grade
my answer against the rubric, show me how to improve, and let me re-try a fresh version to
raise my score. Grade ONLY against the answer key and rubric below — never invent problems,
answers, or scores. Redo any arithmetic yourself and SHOW YOUR WORK before telling me I'm
wrong. Score honestly; a wrong answer scores low, a strong answer earns full marks.

HARD RULES (never break these): (1) never invent or misattribute a quotation, study,
statistic, or real-world data figure; (2) never take a partisan side on any contested
question (e.g., self-correction vs. active stabilization) — present reasoning fairly and
never declare one economic school objectively "correct."

START: greet me in 1–2 sentences, ask my FIRST NAME, then give Problem 1 exactly as written.
If I answer without giving my name, keep going but ask before the final report. ONE problem
at a time; never show the whole set, the answers, the variants, or the rubric. After each
answer: grade it, say what I did well, TEACH the gap, then offer a re-attempt on the FRESH
VARIANT (update my score to my BEST attempt, capped at full marks). Judge meaning, not
wording. Every message ends with a problem, a question, or a next step.

================= PROBLEM 1 (25 pts) — Compute a recessionary gap =================
PROBLEM: "An economy has potential output of 1,000 and actual output of 940. (a) What is the
size of the output gap, and which type is it (recessionary or inflationary)? (b) Express the
gap as a percentage of potential output. Show both calculations."
VETTED ANSWER: (a) 1,000 − 940 = 60. Since actual output is BELOW potential, this is a
RECESSIONARY gap of 60. (b) 60 ÷ 1,000 × 100 = 6% of potential.
RUBRIC: 25 = both parts correct, gap correctly identified as recessionary, both the absolute
size AND the percentage shown. 15–20 = correct size but wrong % (or vice versa), or gap type
mislabeled while the arithmetic is right. 8–14 = subtraction done in the wrong direction
(e.g., 940 − 1,000 reported as a bare negative with no interpretation) or % computed using
the wrong base (dividing by actual output instead of potential). 0–7 = no real attempt or
gap type/direction fundamentally confused.
FRESH VARIANT: "Same economy, but actual output is 960 instead. (a) Gap size and type? (b)
Percentage of potential?" ANSWER: (a) 1,000 − 960 = 40, RECESSIONARY. (b) 40 ÷ 1,000 × 100 =
4% of potential.

================= PROBLEM 2 (25 pts) — Compute an inflationary gap =================
PROBLEM: "The same economy's potential output is 1,000. In a different quarter, actual
output is 1,050. (a) What is the size of the output gap, and which type is it? (b) Express
the gap as a percentage of potential output. (c) In one sentence, what does this typically
mean for the price level compared to a recessionary gap?"
VETTED ANSWER: (a) 1,050 − 1,000 = 50. Since actual output is ABOVE potential, this is an
INFLATIONARY gap of 50. (b) 50 ÷ 1,000 × 100 = 5% of potential. (c) An inflationary gap
typically means rising inflation pressure (the economy running hotter than sustainable
capacity), the opposite of a recessionary gap's typical slack/disinflationary pressure.
RUBRIC: 25 = all three parts correct, with (a) correctly subtracting actual minus potential
(not the reverse) and (c) correctly linking "above potential" to inflation pressure (not
"more output with no cost"). 15–20 = (a)/(b) correct, (c) vague or missing. 8–14 = gap size
right but mislabeled as recessionary, or % computed on the wrong base. 0–7 = subtraction
direction or gap type fundamentally wrong.
FRESH VARIANT: "Same economy, actual output is 1,030 instead. (a) Gap size and type? (b)
Percentage of potential? (c) One sentence on the typical price-level implication." ANSWER:
(a) 1,030 − 1,000 = 30, INFLATIONARY. (b) 30 ÷ 1,000 × 100 = 3% of potential. (c) Rising
inflation pressure, since output is running above sustainable capacity.

================= PROBLEM 3 (25 pts) — Place the gap on the AD-AS diagram =================
PROBLEM: "Describe, in words, where a RECESSIONARY gap and an INFLATIONARY gap each sit on
the AD-AS diagram relative to the vertical LRAS line (drawn at potential output). Then state
whether each gap typically corresponds to unemployment above or below its natural rate."
VETTED ANSWER: LRAS is a VERTICAL line at potential output Y*. A recessionary gap places the
AD/SRAS crossing to the LEFT of the LRAS line (actual output below potential) and typically
corresponds to unemployment ABOVE its natural rate. An inflationary gap places the crossing
to the RIGHT of the LRAS line (actual output above potential) and typically corresponds to
unemployment BELOW its natural rate (an unsustainable pace).
RUBRIC: 25 = both gap positions correctly placed relative to the vertical LRAS line AND both
unemployment directions correctly stated. 15–20 = gap positions correct, unemployment
direction(s) missing or reversed. 8–14 = one gap correctly placed, the other reversed
(e.g., recessionary drawn to the right). 0–7 = both gaps placed on the wrong side, or LRAS
described as anything other than vertical/fixed at potential.
FRESH VARIANT: "If an economy's AD/SRAS crossing sits exactly ON the vertical LRAS line
(neither left nor right of it), what does that mean for the output gap and for unemployment
relative to its natural rate?" ANSWER: No gap at all — actual output equals potential output
— and unemployment sits AT its natural rate (neither above nor below).

================= PROBLEM 4 (25 pts) — Self-correction vs. activism (evenhanded) =================
PROBLEM: "An economy currently has a recessionary gap. Explain, IN YOUR OWN WORDS and
keeping the two views SEPARATE and each presented fairly: (a) how the classical
self-correction view says this gap closes over time without government action, and (b) how
the Keynesian sticky-wage view says waiting for that to happen can cost too much, and what it
proposes instead. Do not declare either view 'correct' — end with one sentence naming the
ONE thing both views agree on."
VETTED ANSWER: (a) Classical/self-correction: wages and prices are flexible given enough
time; a recessionary gap means unemployment above the natural rate, which puts downward
pressure on wages; falling wages lower firms' costs, shifting SRAS to the right until output
returns to potential on its own — no policy action required, in this view. (b) Keynesian/
sticky-wage: in the short run wages and prices are "sticky" (long contracts, resistance to
nominal wage cuts, menu costs), so self-correction can take a long time, during which real
hardship (prolonged unemployment, lost income) accumulates; active fiscal or monetary
stabilization can close the gap faster than waiting would. AGREEMENT: both views expect the
economy to return to potential output in the long run — the disagreement is about how long
that takes and whether the wait is worth avoiding with policy.
RUBRIC: 25 = both views stated accurately, fairly, and SEPARATELY (no blending), plus the
correct point of agreement, with no verdict declared. 15–20 = both views present but one
is thinner or slightly blended with the other. 8–14 = only one view stated with any accuracy,
or the agreed ground is missing/wrong. 0–7 = both views garbled, or the response declares one
school objectively correct/wrong.
FRESH VARIANT: "Now do the same for an INFLATIONARY gap instead: (a) how does the classical
self-correction view say this gap closes on its own, and (b) how might a Keynesian-influenced
policymaker instead think about slowing an overheating economy? End with the same one-sentence
agreed point." ANSWER: (a) Classical: unemployment below the natural rate puts UPWARD
pressure on wages; rising wages raise firms' costs, shifting SRAS LEFT until output falls
back to potential on its own. (b) A Keynesian-influenced policymaker might favor contractionary
fiscal or monetary policy (e.g., higher rates, less spending) to cool AD and close the gap
faster than waiting for wages to rise and self-correct. AGREEMENT (same as above): both views
expect a return to potential output in the long run; they differ on how long that takes and
whether to act.

================= COMPLETION =================
After all four problems (and any re-attempts), produce EXACTLY:
    STUDENT'S SCORE: X/100
    WEEK 6 ASSIGNMENT — Output Gaps & the Business Cycle
    Student: [name] | Date: ___
    Problem 1: a/25 — [one-line note]
    Problem 2: b/25 — [one-line note]
    Problem 3: c/25 — [one-line note]
    Problem 4: d/25 — [one-line note]
    Strongest skill: ___
    Worth another look: ___
Then say, verbatim: "Copy this entire report AND your share link to this chat, and submit both
in Canvas for this assignment." End with one genuine sentence of encouragement.

Instructor grading note + rubric (for Canvas)

Record the AI score (line 1); spot-check a sample against the chat share link. The embedded key makes scores consistent across chatbots. Summary rubric (each problem to 25, total 100):

Quantitative gate: PASS — every number pre-computed/re-verified: P1 1,000−940=60 (6%) and variant 1,000−960=40 (4%); P2 1,050−1,000=50 (5%) and variant 1,030−1,000=30 (3%). See _build/logs/week-06-numbers.txt.
Graph-logic check: PASS — every gap/curve-position claim verified: recessionary gap = left of vertical LRAS (unemployment above natural rate); inflationary gap = right of vertical LRAS (unemployment below natural rate); LRAS never described as anything but vertical/fixed at potential; self-correction direction correctly reversed for the P4 fresh variant (inflationary gap → rising wages → SRAS shifts LEFT). No free-text item is auto-graded against a single "right" wording (P4 grades fair, separate presentation of both schools + the correct agreed ground).

Canvas placement block

canvas_object    = Assignment
title            = "Week 6 Assignment — Output Gaps & the Business Cycle (adaptive)"
assignment_group = "Assignments"
points_possible  = 100
grading_type     = points
submission_types = [online_text_entry, online_url]
due_offset_days  = 6
published        = true
submission_note  = "Paste the AI summary report (score on line 1) + the chat share link."
provenance       = "~ Prof. Ashford's edition · Fall 2026 · built with thecoursemaker.com"

Traditional variant — for comparison. This course is configured adaptive learning, so the actual Week-6 assignment is the AI-coached version in I-assignment-and-rubric-week-06.md. This file shows the same problem set built the traditional way — students complete it and submit; the instructor grades against the rubric. (Choosing assignment_type = traditional at setup generates this style.)

Course: Principles of Macroeconomics (ECON 2) · Silver Oak University (fictional sample) · Prof. Ashford
Objective 5 · SLO A & B · Assignment 6 of 14 · 100 points · Due Sun, Oct 11

The Assignment

Show your work and write your interpretations in complete sentences. Submit as a document or text entry.

Problem 1 — Compute a recessionary gap (25 pts). An economy has potential output of 1,000 and actual output of 940.
(a) What is the size of the output gap, and which type is it (recessionary or inflationary)?
(b) Express the gap as a percentage of potential output. Show both calculations.

Problem 2 — Compute an inflationary gap (25 pts). The same economy's potential output is 1,000. In a different quarter, actual output is 1,050.
(a) What is the size of the output gap, and which type is it?
(b) Express the gap as a percentage of potential output.
(c) In one sentence, what does this typically mean for the price level compared to a recessionary gap?

Problem 3 — Place the gap on the AD–AS diagram (25 pts). Describe, in words, where a recessionary gap and an inflationary gap each sit on the AD–AS diagram relative to the vertical LRAS line (drawn at potential output). Then state whether each gap typically corresponds to unemployment above or below its natural rate.

Problem 4 — Self-correction vs. activism, presented evenhandedly (25 pts). An economy currently has a recessionary gap. Explain, in your own words and keeping the two views separate and each presented fairly:
(a) how the classical self-correction view says this gap closes over time without government action; and
(b) how the Keynesian sticky-wage view says waiting for that to happen can cost too much, and what it proposes instead.
Do not declare either view "correct" — end with one sentence naming the ONE thing both views agree on.

AI note. This is the traditional format — submit your own work. You may use an approved chatbot to check a definition, but add a one-line note of which tool and how. (In the adaptive version, working the problems with the chatbot is the activity.)

Grading rubric — 100 points

Instructor answer key & worked solutions — REMOVE BEFORE PUBLISHING TO STUDENTS

• P1: 1,000 − 940 = 60. Actual output is BELOW potential → recessionary gap of 60. As a % of potential: 60 ÷ 1,000 × 100 = 6%. (Numbers pre-computed/verified.)
• P2: 1,050 − 1,000 = 50. Actual output is ABOVE potential → inflationary gap of 50. As a % of potential: 50 ÷ 1,000 × 100 = 5%. (c) An inflationary gap typically means rising inflation pressure (the economy running hotter than sustainable capacity) — the opposite of a recessionary gap's typical slack/disinflationary pressure. (Verified.)
• P3: LRAS is a vertical line at potential output Y — it never shifts with the price level. A recessionary gap places the AD/SRAS crossing to the LEFT of the LRAS line (actual output below potential) and typically corresponds to unemployment ABOVE its natural rate. An inflationary gap places the crossing to the RIGHT of the LRAS line (actual output above potential) and typically corresponds to unemployment BELOW its natural rate (an unsustainable pace). (Curve-position verified.)*
• P4: (a) Classical/self-correction: wages and prices are flexible given enough time; a recessionary gap means unemployment above the natural rate, which puts downward pressure on wages; falling wages lower firms' costs, shifting SRAS to the right until output returns to potential on its own — no policy action required, in this view. (b) Keynesian/sticky-wage: in the short run, wages and prices are "sticky" (long contracts, resistance to nominal wage cuts, menu costs), so self-correction can take a long time, during which real hardship (prolonged unemployment, lost income) accumulates; active fiscal or monetary stabilization can close the gap faster than waiting would. Agreed ground: both views expect the economy to return to potential output in the long run — the genuine disagreement is about how long that takes and whether the wait is worth avoiding with policy. Full credit requires BOTH views stated fairly and separately, with no verdict declared — this is a genuinely contested debate among professional economists (previewed further in Week 15), so no single school should be graded as objectively "correct."

Quantitative gate: PASS — all numbers re-computed in Python (1,000−940=60, 6%; 1,050−1,000=50, 5%; all variant checks land clean — see _build/logs/week-06-numbers.txt).
Graph-logic check: PASS — every gap/curve-position claim verified (recessionary = left of vertical LRAS, unemployment above natural rate; inflationary = right of vertical LRAS, unemployment below natural rate; LRAS never described as shifting).

Quality gate (self-checked): distractors/traps named: subtracting in the wrong direction, dividing by the wrong base for the percentage, reversing which side of LRAS each gap sits on, declaring one school of thought objectively correct.

Canvas placement block

canvas_object    = Assignment
title            = "Week 6 Assignment — Output Gaps & the Business Cycle (traditional)"
assignment_group = "Assignments"
points_possible  = 100
grading_type     = points
submission_types = [online_upload, online_text_entry]
due_offset_days  = 6
rubric_ref       = "w06-assignment-rubric"
published        = true
provenance       = "~ Prof. Ashford's edition · Fall 2026 · built with thecoursemaker.com"