Lesson Plan: National Income Economics

This lesson plan includes the objectives, prerequisites, and exclusions of the lesson teaching students how to identify the gross national income (GNI) and the gross domestic product (GDP) as measures of national income and how to characterize three different methods to measure them.


Students will be able to

  • understand the flow of money between households and between firms,
  • distinguish between the definitions and components of GNI and GDP and understand GNI and GDP as measures of national income,
  • understand the difference between nominal (money) GNI/GDP and real GNI/GDP,
  • understand the following three ways to measure GNI/GDP: output approach (production approach), income approach, and expenditure approach,
  • understand the relationship between national income, saving, consumption, and investment,
  • understand how per capita GNI/GDP is computed.


Students should already be familiar with

  • fundamental economic problem,
  • difference between microeconomics and macroeconomics,
  • different types of resources,
  • choice and opportunity costs,
  • factors of production.


Students will not cover

  • price index,
  • shadow economy,
  • using explicit formulas to measure GDP/GNI, savings, and so on.

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