Ty wrote
Thanks for the reply. I get it. It just doesn't seem to all fit together nicely. The RAM16K chip supports a 14bit address, the PC increments up to 16bit and the instructions support 15bit addresses. However, it probably would have been much harder for students to create a 15bit PC and a 15bit RAM.
Don't confuse the RAM with the ROM.
The program you are running is loaded into a 32 kword ROM, it is NOT loaded into RAM.
The Program Counter's output is the address value for the ROM, not the RAM. The address for the RAM always comes from the A-register (while the address for the ROM always comes from the program counter).