Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.
Understanding
- I can explain what positive and negative shocks to AD and SRAS are, and decide which curve an event shifts. (Guide: “What a shock is”; Practice Q2)
- I can state the short-run effects of an AD shock on the price level, output and employment. (Guide: “Demand shocks: shifts of AD”; Practice Q1)
- I can state the short-run effects of an SRAS shock on the price level, output and employment. (Guide: “Supply shocks: shifts of SRAS”; Practice Q4)
- I can distinguish demand-pull from cost-push inflation and explain stagflation. (Guide: Worked example 2; Practice Q2, Q6(d))
Skills
- I can use the multiplier to find how far AD shifts after a change in spending. (Guide: Worked example 1; Practice Q5(a))
- I can find the new short-run equilibrium from schedules after a shift, and calculate the inflation rate and new unemployment rate. (Guide: Worked examples 1–2; Practice Q5(b)–(c))
- I can draw a correctly labelled AD–AS graph showing a shift of AD or SRAS, with both equilibria labelled. (Guide: Figures 1–2; Practice Q6)
Reasoning
- I can explain why real output rises by less than the horizontal shift of AD. (Guide: Worked example 1(d); Practice Q5(d))
- I can identify the type of shock from data on the price level and real output. (Guide: “All four shocks from the same starting point”; Practice Q3, Q7(a))
- I can explain why, when AD rises and SRAS falls together, the price level must rise but the change in output depends on the sizes of the shifts. (Practice Q7(b)–(d))
All ticked? Move on to the long-run self-adjustment study guide, or return to the course roadmap.