Graphing shifts in short-run aggregate supply and aggregate demand with stacked transparencies and a document camera

Students should know the reasons for SRAS and AD curves to shift to the right and to the left. It will help for students to have practiced drawing shifts in these curves on their own as part of a prior assignment.

Overview

The goal of the activity is for teams to graph exogenous changes in the macroeconomy in a Keynesian model that shift the short-run aggregate supply (SRAS) and aggregate demand (AD) curves. Students are each provided four blank template graphs on an 8.5-inch by 11-inch handout (attached). Each graph is identical containing one SRAS curve and one AD curve. Each graph is identified with a corresponding letter: A, B, C, and D. The letters are to correspond with a scenario consisting of an exogenous change(s) that the students are to interpret and graph. Below are example scenarios—the facilitator may provide different scenarios than those provided.

A. $2 trillion decrease in taxes collected by the government
B. Nominal wages fall
C. The central bank decreases the quantity of money
D. Commodity prices fall and government spending on infrastructure increases by $3 trillion

For each scenario, students decide what curve(s) shifts and in which direction(s). Students then draw the new curve(s) directly on their own copies of the handout on the designated lettered area. Teams are also each provided one 8.5-inch by 11-inch blank transparency slide, an erasable transparency slide marker, and a transparency slide eraser (e.g., a moist paper towel). Each team decides collaboratively on how to draw the solution for each scenario (e.g., a new second AD curve shifted to the right). Each team shares its solution to the scenario by placing the transparency directly over the handout and drawing in the new curve(s) on the transparency. Teams do not need to trace over the lines on the template graphs. Teams are also to write their team identifier on the transparency on the indicated line. When time is called, the facilitator collects each team's transparency and stacks them on top of a blank handout—the same as provided to the students. The facilitator then places the stack of transparencies on top of the handout on a document camera for projection to the entire class. The facilitator then leads the class in a discussion of teams' answers. Differences between teams can quickly be seen in this form of a simultaneous report.

Expected Student Learning Outcomes

Interpret changes in the macroeconomy affecting the short-run aggregate supply and aggregate demand.

Graphically represent changes in the macroeconomy by graphing shifts in short-run aggregate supply and aggregate demand curves.

Information Given to Students

Four blank macroeconomics scenario graphs (PowerPoint 168kB Jan6 18)

Remind teams to line up corners of the transparency with corners of the handout or else teams' solutions will not line up when stacked and projected on the document camera. If the class is less versed in SRAS and AD shifts, do one scenario at a time—present only one scenario to the teams followed by simultaneous team reports and class-wide discussion. Otherwise, teams can be asked to draw solutions to all four scenarios before the team simultaneous reports.

This activity builds understanding of the Keynesian model. It can be followed by activities using the model which involve more critical thinking.

For this exercise, there is only one right solution to each prompt (e.g., a shift to the right of the AD curve). So teams' answers can be used to assess student learning. In an individual summative assessment, students can be presented similar scenarios and asked to graph them.

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