GDP Lesson Plan: Intro to GDP

This FREE economics lesson plan introduces Gross Domestic Product (GDP) through videos, interactive exercises, and classroom activities.

This step-by-step 45-minute lesson has everything you need to use it immediately, including activity sheets, Google slides, and answer key. We also include ways for you to tailor the lesson to your class by providing additional resources like assessment questions, teacher tips, and engaging extension activities. 

Learning Objectives

Students will be able to:

• Define GDP.
• Describe how GDP is used to measure economic activity.
• Calculate GDP using the expenditure approach and explain what is included in each component of GDP.
• Identify a few limitations of GDP as a proxy of economic activity.

Economic Concepts Introduced

• Gross Domestic Product or GDP  is the total market value of the goods and services produced within the United States in a year.
• The Expenditure Approach calculates GDP by summing household consumption spending, investment expenditures, purchases by federal, state, and local governments, and net exports. The equation is written as: C + I + G + (X-M) = GDP. This is also called the national spending approach.
• Consumption spending (as defined by the expenditure approach) is private spending on final goods and services.
• Government Purchases are spending my all levels of government on final goods and services. Transfers are not included in government purchases.
• Investment (as defined by the expenditure approach) spending is private spending on tools, plant, and equipment used to produce future output.
• Net Exports is shorthand for the expression exports - imports or X-M.
• Imports are goods and services produced in a foreign country that are purchased domestically. 
• Exports are goods and services produced domestically that are purchased by someone in another country. 
• Finished Goods or Services are those that will not be sold again as part of some other good.
• Intermediate Goods refer to partially finished goods that are then used as an input to the production of other goods that become final goods.