Gross Domestic Product (GDP) - Lesson Demonstration (Transcript)
Chris Cannon, 12th grade economics teacher, Sandy Creek High School, Tyrone, Georgia: The ability to bounce ideas off somebody is incredibly important, always has been. That's where better ideas come from. So the ability to talk through a lesson instead of me just going through a list of bullet points, for example—the ability to get some feedback from the students does two things. One, it brings them into the lesson. And, once they're brought into the lesson, they're much more likely to ask questions and participate. And the second thing it does is it gives me a little bit of a chance to kind of preassess them as we're talking through it. That's why I ask them so many questions that refer back to things we did a couple of days ago. They have to actually be an economist essentially, and do what economists do and make predictions. They're going to have to use GDP numbers, unemployment numbers, CPI, future upcoming fiscal policies. And it's all real, and it's all very practical, and that motivates them I think more than anything else.
I. Vocabulary Matching Activity
Teacher: So far this week, we've done two of the major measurements of the economy, and what are those two? Inflate? Not inflammation. Inflation and unemployment. All right, so today we're going to do the big, the third one of the big three, and that's GDP. So what we're going to do right out of the gate here is you're going to get an index card. You can look at it, but don't show anybody around you what's on it.
OK, here's the deal. You all have a vocab word or a definition that's related to the concept of GDP. When I say "Go" in about 20 seconds here, you're going to get up and walk around the room and try to find your match. So if you have a word, you need to find the definition that matches it. If you have a definition, you've got to find the word that matches it. When you find your match, I need you to isolate yourselves somewhere in the room so you get out of the crowd. Are you with me on this? So go to that back corner, come way up here—I don't care where you go, just get away from the group, because otherwise I have everybody standing together and I can't tell whether or not you found the match.
All right, you may not know what these words mean, but hopefully through the process of elimination, you can figure out. I will tell you that second period got perfect matches, so you have to raise the bar here. They matched them all perfectly the first time. Go! Once you've found your match, isolate yourself—that's the important part.
[Students walk around looking to match words and definitions.]
Teacher: As I get to each person, I want the person who has the word to say the word first and everybody else listen for the definition. I'll put the words up here on the screen so we can kind of keep track of them. Consumption.
Student: It's the value of all goods and services purchased by households.
Teacher: Purchased by households. Think circular flow diagram. that's a match.
Student 1: Net exports.
Student 2: The dollar value of all goods and services produced in the U.S. and shipped to other countries minus the value of the goods and services imported from other countries.
Student 3: GDP.
Student 4: Currency value of all final goods and services produced within a countrys borders.
Teacher: Give yourselves a round of applause. that's excellent. Well done.
Teacher: Im always looking for something. What can you do to get them involved? The activities help probably more than anything else. Your rapport with them is huge—whether or not you care about them and you listen to them. And then, yeah, showing them why the stuff matters is another big motivator. that's something Ive learned over the years—the more I can get them to see this isnt just something you have to learn for the test, this is real life.
II. Discussion: Components of GDP
Teacher: GDP is how we're going to measure growth. I want you to kind of think of GDP as the appetite. When you get sick, what happens to your appetite?
Students: It decreases.
Teacher: It decreases. If you get sick, in most cases, your appetite decreases. Think of GDP like that. If the economy gets sick, who will buy as much stuff? So we don't produce as much stuff, and the whole economy kind of slows down and becomes lethargic. Remember I told you to think of the economy as like a patient, and if GDP goes down, then it means our appetite is decreased. And the way we're going to calculate it today, remember all the measurements we've done, we have to have a way to calculate them. The way we're going to calculate GDP today is through expenditures, through expenditures.
Teacher: I think every teacher can do that, just break it down. If you're doing something and it's taking more than 10 minutes, stop and ask, what can I do that's different? It could be a question, it could be a discussion, it could be to get them out of their seat, it could be giving something different to read, and that's easy to do. It's not easy to do time-wise, but it's easy to just kind of break things into smaller chunks. And you'll find your students are way more engaged.
Teacher: Rising prices in the United States encourage consumers to purchase similar goods in foreign countries. Without even hesitation. Thumbs up, thumbs down, or thumbs sideways? Thumbs up. That is net exports, now the question is does it increase GDP or decrease GDP?
Teacher: Economic education is important for everybody, adults included. This group is particularly, I think, susceptible, I guess, to making poor decisions because they're faced with so many all at once this year—college, even stuff like prom and who they're going to go to prom with, whether or not they rent a limousine, getting a job. Do they go to college right away, or do they wait a year? Do they go during the summer, or do they not go during the summer? Do they get a job? Do they get an internship? There's a lot of decisions all coming up at the same time. And so this, in their senior year, I think it's important because you can kind of teach them to weigh the cost benefits, really think about what they're giving up with these decisions, and then the personal finance stuff is incredibly important because they're starting to earn income in a lot of cases.
IV. Debrief and Examine Economic Analysis Report
Teacher: The Bureau of Economic Analysis is our primary group, and every so often they publish a report and this report is the National Income and Product Accounts Report. I just happen to have a copy of the one that came out yesterday. I know you're excited about it. This is the real live stuff for all you people who want to know what can you can do with an economics degree. All right, so with pencil in hand—you can talk to a neighbor for this as well—I want you to read through this and I want you to underline or put a little note by anything that indicates whether GDP is increasing or decreasing, and anything that you see that indicates any of the components of GDP. If you see anything related to consumption or business investment, put a little note by it. Anything that talks about the direction of GDP or anything that talks about the components of GDP—make a little note next to it so if I call on you, you have something to tell me. Sheyla, what did you note on paper? I see some things underlined.
Student: The increase in real GDP in the fourth quarter.
Teacher: So GDP increased. Keep going in that paragraph. Why did it increase?
Student: Because of the investment.
Student: The inventory.
Teacher: Inventory investment.
Student: Yeah, the consumption.
Student: And the exports.
Teacher: Exports. That's good, you can stop there.
Teacher: I think when a student walks into the room, they're teachable. They're looking for an opportunity to engage with somebody, and this is true for 99 percent of the students. And all it takes is just, is reaching out to them just a little bit.