Federal Reserve Economic Fundamentals: High School Curriculum
Introduce basic economic concepts with ten independent hands-on lesson plans.
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Video Q&A
0-15 min
Levels of GDP vs. Percentage Change in GDP
OVERVIEW
This video assignment provides students with an explanation for why economists prefer to discuss changes in GDP through percentages and discusses why percent change is a necessary metric to gain a full picture of changes occurring.
GDP is often expressed in dollars, or “levels” but it is often more useful to discuss changes in GDP in percentages. For example, let’s say GDP is $20 Trillion, meaning that the total market value, expressed in dollars, of all final goods and services produced in an economy in a given year is $20 Trillion. Now, let’s say the economy increased in size by $10 billion – that seems like a large increase, right? Well, it is large in dollar terms, but in percentage terms it is 0.05 percent, or 5 one-hundredths of one percent, that’s very small.
As such, economists generally find it helpful to talk about changes in GDP in terms of percentages.
Related Resources
CURRICULUM UNITS
MODULES
16-30 MIN
GDP: Measurement and Growth
Explore the measurement and growth of GDP.
INFOGRAPHICS & COMICS
Gross Domestic Product
Visualize the components of Gross Domestic Product (GDP).
LESSONS & ACTIVITIES
0-15 MIN
10 FRED Graph Activities in 10 Minutes
Learn about data through graphing activities.
AUDIO Q&A
0-15 MIN
Gross Domestic Product
Learn what GDP measures, how it is calculated, and how it can be used.
READING Q&A
16-30 MIN
How Do Imports Affect GDP?
Learn how imports are calculated in GDP.
More in This Series
VIDEO Q&A
0-15 MIN
Definition of GDP
Provide a definition of GDP, what it measures, and how it is calculated.
VIDEO Q&A
0-15 MIN
The Components of GDP
Explore the expenditure approach that textbooks use to explain GDP.
VIDEO Q&A
0-15 MIN
Measuring Exports and Imports in GDP
Look at how imports and exports are counted in GDP.
VIDEO Q&A
0-15 MIN
Per Capita GDP
Provide students with an easy-to-understand definition of per capita GDP.
VIDEO Q&A
0-15 MIN
Real vs. Nominal GDP
Explain the difference between real and nominal GDP.
VIDEO Q&A
0-15 MIN
Trend Growth
Explain potential output and why the economy might experience output gaps.
VIDEO Q&A
0-15 MIN
Automatic Stabilizers
Explain automatic stabilizers and how they help smooth the business cycle.
