Issachui AcademyMATHEMATICS & ECONOMICS
IAL ECONOMICS STUDY GUIDE Unit 2 · Macroeconomic Performance and Policy

IAL ECONOMICS / STUDY GUIDE

Diagram index

Construction order: label axes and units → draw the required curves → label beside curve ends → mark equilibrium coordinates with dotted guides → add shift arrows or identify areas. For flow charts, follow the direction of the economic relationship; do not invent price or quantity axes.

Select the diagram that explains the question. Reproduce the essential labels and explain the mechanism in words. This index points to representative diagrams; paired and alternative cases remain beside them in the chapter.

Use when explainingEssential labels and checksDiagram
Short-run inflation–unemployment trade-offInflation rate and unemployment rate; SRPC; relevant movement.p. 16
A spending-component changePrice level, real output; AD1/​AD2; shift arrow.p. 36
A production-cost changePrice level, real output; SRAS1/​SRAS2; shift arrow.p. 46
Neoclassical productive capacityVertical LRAS; potential output; distinguish an AD movement from capacity growth.p. 48
Keynesian capacity constraintsOne continuous AS curve; spare-capacity and near-capacity regions.p. 49
Demand-led output and price changesAD1/​AD2; AS; both equilibrium price levels and outputs.p. 57
An adverse supply shockSRAS shift left; AD; higher price level and lower real output.p. 59
Injections, withdrawals and incomeHouseholds/​firms; flow directions; S, T, M and I, G, X.p. 65
Actual versus potential output over timeReal output/​time; both series; positive and negative gaps.p. 71
Interest-rate policy channelsPolicy rate; rates/​assets/​confidence/​exchange rate; spending; inflation and import prices.p. 86
An increase in productive capacityLRAS1/​LRAS2; rightward arrow; potential output before/​after.p. 95
Enlarged diagram