The GDP Expenditures Equation: What Is GDP and How Do We Measure It?

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.

Awards

This lesson received the 2021 Curriculum Bronze Award from the National Association of Economic Educators.
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Education Level: College 9-12
Subjects: AP Economics Economics
Concepts: Gross Domestic Product/GDP Business Cycle
Resource Types: Lesson PowerPoint
Languages: English
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