Question

Which of the following probably occurred as the U.S. economy experienced increasing real GDP in 2009? Check all that apply.

__ Retail sales increased.
__ Industrial production declined.
__ Consumer spending increased.
__ Home sales declined.

Answer 1

__ Consumer spending increased.

__ Retail sales increased.

Step-by-step explanation:

GDP is the sum of all production of goods and services in an economy over a given period of time. In calculating GDP, consumption, investment, government spending and the net balance of foreign trade (exports minus imports) are considered. Increased retail sales mean increased consumer spending. This is an increase in aggregate consumption, which is one of the variables of GDP, so increased sales and consumer spending raises GDP. Conversely, if sales and industrial production decline, GDP declines.