Created by Ms. Mariel Joy S. Abcede for Final Demostration Teaching at Laboratory High School, Soutjern Luzon State University, Lucban, Quezon, Philippines

1. I. Objectives
At the end of the lesson, the students should be able to:
1. Identify the different methods how GDP is measured.
2. Recognize how the economy is growing by the two measures.
3. Differentiate Gross National Product from Gross Domestic Product
II. Subject Matter
Topic: Measuring National Output: GDP and GNP
Reference: Economics: Basic Principles Application and Issues. Vibar Publishing pp.
166-175
Principles of Economics pp.159-169
Materials: Visual aids, graphic organizers, cartolina, whiteboard marker
III. Procedure
Teacher’s Activity Student’s Activity
A. Classroom Management
1. Opening Prayer
2. Checking of Attendance
B. Motivation
The teacher will show a picture of two
man bringing their cases that symbolizes
the GDP and GNP. With these, the
students will identify the different goods
and services to where it belong.
The students will participate to
the activity as part of the
motivation

2. C. Lesson Proper
So based on the activity, I want you to
differentiate GDP and GNP. I will group
you in pair to answer it.
After that you will share at least one thing that
they alike and differ with each other.
What did you notice between the two?
Your answers are correct. GDP pertains to
market value of final goods and services
produced in a given year. It also excludes
production abroad by Philippine businesses. On
the other hand, GNP is the total market value of
all the final goods and services produced by a
nation’s residents (e.g. Filipinos), no matter
where they are located.
In addition to what you have shared, GDP and
GNP is a big picture of financial matters and
nation’s economy.
So how can we measure the national output?
The students will do the task
given by the teacher
Each pair will share their work in
front of the class.
Although they have the same
approaches in measuring output
but still they are differ in
determining the final goods.
We can measure the national
output through the three different
approaches which are the
Expenditure Approach, Income
Approach and Industrial Origin
Approach.

3. That’s right! First, we have Expenditure approach.
This approach measures GDP and GNP by adding
all the spending for final goods during a period of
one year. This consists of consumption
expenditures that comprise the total spending
made by the households (C), investment and
government expenditures includes the value of
goods and services government at all level
purchases measured by their costs (I), (G), and net
exports (X-M). But in GNP, we also add the Net
Factor Income from Abroad and Statistical
Discrepancy.
The teacher will show an illustration regarding the
three approaches.
What is the equation for expenditure approach?
You will get the symbol for of each expenses or
goods to show the equation.
Correct! It is also the total amount that people
spend on goods and services. As you can see in
the table, personal consumption has the largest
component of among the rest.
The teacher will show an example computation
using expenditure approach.
GDP=4,226,120+587,436+864,531+(2,797,986-
2,873,562)
GNP=4,226,120+587,436+864,531+(2,797,986-
2,873,562)+537,687+430,086
Now, answer this. You will solve the GNP only.
GNP= 3, 773, 038+ 521, 664+ 793, 989+ (2, 589,
739- 2, 816, 243)+ 447, 145+ 575, 719
Then, what is the next approach that is used in
measuring national output?
That’s right! It is more complex approach to
measuring GDP and GNP. In GNP this approach
obtained the personal income, government
GDP= C+I+G+ (X-M)
GNP= C+I+G+ (X-M) + Net
Factor Income from Abroad +
Statistical Discrepancy
The students will answer the GNP
using expenditure approach.
The second approach is the
Income Approach.

4. income, corporate income, indirect taxes, and
depreciation.
Correct! Then how it was computed?
The teacher will show an example computation
using income approach.
GNP= 2,405, 320+ 1, 387, 780+ 1, 504, 032+ 870,
654- 754, 290+546, 079
Again, answer this. Solve the GNP only.
GNP= 3,506, 340+ 1, 290, 384+ 1, 456, 987+ 999,
847- 835, 618+632, 079
When the three forms of incomes are added, one
arrives at a measure of the national income or
GNP. In addition, compensation or personal
income is the largest of national income accounts.
It is also the total income earned by the workers
and businesses.
Then the last approach is the industrial origin
approach. How do you understand this approach?
That’s right! The economy’s production sectors
are agriculture, industry and services. This
approach measured the total amount of goods and
services produced by the different sectors.
As you can see in the table, the service sector has
the largest component in GNP and GDP.
Why do you think it has the largest component?
That’s right! So what is the equation to compute
GNP through this approach?
GNP= PI+GI+CI+IT+S+D
The students will answer the GNP
using income approach
It is another way to arrive at GNP
by adding up all the value of
production of the different sectors
of the economy.
It is because there are lot of
Filipinos who gives their services
rather than goods.
GDP by Industrial Origin=
Agriculture, Fisheries and
Forestry +Industry + Services
GNP= GDP + NFIA

5. The teacher will show an example computation
using industrial origin approach.
GDP= 855, 452+ 1, 907, 980+ 3, 269, 192
GNP= 6, 032, 624+ 537, 687
Then again, answer this. Solve first the GDP then
GNP.
GDP= 780, 072+ 1, 735, 148+ 2, 922, 685
GNP= 5, 437, 905+ 447, 145
No doubt, you really understand how to use the
three approaches in measuring the national output.
The students will answer the GNP
using income approach
D. Generalization
Classify the phrases regarding the Gross National Product and Gross Domestic Product
whether it is their differences or their similarities.
GNP GDP
1. Market value of final goods and services produced in a given year.
2. Income earned by Overseas Filipino Workers
3. Value of commodities produced within the country’s borders.
4. Goods that was produced by the foreigners within the country.
5. Commodities produced by a country’s citizens.
Differences Differences

6. E. Valuing
The teacher will present a video presentation that shows the relations of GNP and GDP to economy.
IV. Evaluation
SET 1
Based from the video you that have watched answer this question. (10 points)
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
__________________________________________________________________________________.
How can you say that our
economy is near to
prosperity? Or wealthy?

7. SET 2
Choose one approach that you believe is the most applicable approach to measure national output.
Explain your answer. (10 points)