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 why the SRPC slopes downward and why the economy is always on its current SRPC. (Guide: “The short-run Phillips curve (SRPC)”)
- I can explain why the LRPC is vertical at the natural rate of unemployment. (Guide: “The long-run Phillips curve (LRPC)”)
- I can match each AD–AS event to its Phillips curve effect, including the opposite directions of SRAS and SRPC shifts. (Guide: “Equilibrium and gaps on the graph” table; Practice Q3, Q7(b))
Graphing
- I can draw a correctly labelled Phillips curve graph with the SRPC, the LRPC and long-run equilibrium. (Guide: Figure 1; Practice Q6(a))
- I can locate inflationary and recessionary gaps relative to the LRPC. (Guide: “Equilibrium and gaps on the graph”; Practice Q1, Q5(b))
- I can show a demand shock as a movement along the SRPC. (Guide: Worked example 1; Practice Q2, Q6(b))
- I can show a supply shock as a shift of the SRPC. (Guide: Worked example 2, Figure 2; Practice Q3, Q7(a))
Reasoning and data
- I can read inflation and unemployment combinations from SRPC data and find the short-run trade-off. (Guide: Worked example 1; Practice Q5)
- I can explain how the SRPC shifts in the long run after a demand shock, and where inflation ends up. (Guide: Worked example 1(d); Practice Q6(d)–(e))
- I can identify factors that change the natural rate of unemployment and so shift the LRPC. (Guide: “What shifts the LRPC”; Practice Q4, Q7(d))
- I can explain the policy dilemma after an adverse supply shock. (Guide: Worked example 2(c); Practice Q7(c))
All ticked? Move on to Topic 5.3: the money growth and inflation study guide, or return to the course roadmap.