Description: In this lesson, students learn the definition of gross domestic product (GDP) and the composition of the expenditure categories of GDP. They participate in an active learning demonstration of the GDP expenditure equation [GDP = C + I + G + (X – M)] to understand the relationships among the variables and the effect of changes in aggregate spending on GDP. Special attention is given to the effect that imports have on GDP.
Click HERE to access the main lesson page from the St. Louis Fed
Click HERE to download the instructor procedure (PDF)
Click HERE to download the lesson PowerPoint slides