Lesson Plan

• Describe the definition of GDP and why a “real” measure is required.
• Apply the formula Real GDP = (Nominal GDP ÷ GDP Deflator) × 100 to calculate real output.
• Interpret real GDP growth rates and relate them to economic conditions.
• Analyse the main limitations of real GDP as an indicator of economic welfare.

• Projector and screen
• Whiteboard and markers
• Printed worksheet with the Country X data table
• Calculators (one per pair)
• Handout of the Real GDP formula and GDP Deflator definition
• Graph paper for sketching the line diagram

Begin by asking students how they would compare the economic performance of two countries over time. Review the definition of GDP and remind them of the difference between nominal and real values. Explain that today they will learn to calculate real GDP, interpret growth, and evaluate its usefulness.

1. Do‑now (5') – Quick quiz on the definition of GDP and the impact of price changes.
2. Mini‑lecture (10') – Introduce real vs. nominal GDP, present the Real GDP formula and the GDP Deflator.
3. Guided calculation (15') – In pairs, use the worksheet to compute real GDP for 2015 and 2020 and the growth rate.
4. Group discussion (10') – Interpret the growth result, link to employment trends, and discuss the limitations of real GDP.
5. Diagram activity (10') – Students sketch a line graph showing nominal and real GDP over time, highlighting divergence.
6. Check for understanding (5') – Exit‑ticket question: “Why might two economies with the same real GDP growth experience different living standards?”

Summarise the key steps for converting nominal GDP to real GDP and the insights gained from growth rates. Collect exit tickets and assign a homework worksheet that requires additional real‑GDP calculations and a short paragraph on the limitations of the measure.