GDP Explained: Understanding the Economy’s Core Metric
Student Worksheet
Economist Simon Kuznets developed GDP in the 1930s so Depression-era governments could track whether recovery efforts were working, and the reading still uses his logic to separate real growth from mere price increases. If Nominal GDP rises 5 percent while the GDP deflator shows prices up 3 percent, Real GDP grew only about 2 percent, the calculation policymakers rely on before raising interest rates.
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