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30 minutes
High School - College
111 classes this year
Subjects: AP Economics Data Literacy Economics
Topics: Economic Fluctuations Trade

GDP is a useful measure of the health of the economy, and among the most important and widely reported economic data. However, the current “textbook treatment” of how international trade is measured as part of GDP can lead to misunderstanding the role trade plays in the economy. This issue of Page One Economics intends to correct misconceptions and provide clear instruction of how imports affect GDP.

VIew Voluntary National Content Standards in Economics

Content Standard 5: Trade
Grade 8 Benchmark
5. Imports are foreign goods and services that are purchased from sellers in other nations.
6. Exports are domestic goods and services that are sold to buyers in other nations.

Content Standard 18: Economic Fluctuations
Grade 8 Benchmark
1. GDP is a basic measure of a nation’s economic output and income. It is the total market value, measured in dollars, of all final goods and services produced in the economy in one year.
2. GDP can be computed by summing household consumption spending, investment expenditures, purchases by federal, state, and local governments, and net exports.
3. Net exports equal the value of exports (goods and services sold to other countries) minus the value of imports (goods and services bought from other countries). Net exports can be either positive (trade surplus) or negative (trade deficit).


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