Graphing Practice- AD/AS and the Phillips Curve

Mr. Clifford introduces key macroeconomic concepts such as recession, full employment, and inflation. He explains how to identify these concepts on various economic graphs, including aggregate demand and supply, the Phillips Curve, the business cycle, and the production possibilities curve. The video covers how to recognize recessionary and inflationary gaps and their implications for unemployment and inflation. Students learn to interpret these graphs and understand the relationships between economic indicators.

Which of the following is NOT one of the key concepts introduced in the first section?

• Recession

• Full employment

• Inflation

• Monetary policy

On the Phillips Curve, what does a recessionary gap indicate?

• High inflation and high unemployment

• Full employment

• High unemployment and low inflation

• High inflation and low unemployment

In the business cycle graph, where is a recessionary gap located?

• At the peak of the cycle

• Below the trend line

• On the trend line

• Above the trend line

What happens to unemployment when aggregate demand shifts to the right, reaching full employment?

• Unemployment remains the same

• Unemployment decreases

• Unemployment increases

• Unemployment becomes zero

What does an inflationary gap indicate about the current output compared to full employment output?

• Current output is below full employment output

• Current output is at full employment output

• Current output is beyond full employment output

• Current output is equal to zero