im having a little toruble with the following question and answer:The Commerce Department reported that retail sales increased 1.3 percent in June. Net exports were up 0.8 percent in the first quarter and inventories held by businesses rose by 0.3 percent in June. Total sales by businesses rose 0.3 percent.​Source: Commerce​ Department, 2013 Does the statement that total sales by businesses were up 0.3 percent mean that GDP increased by 0.3​ percent? The statement that total sales by businesses were up 0.3 percent means that GDP​ ______ because​ ______.  A.did not change by 0.3​ percent; GDP measures production of all final goods and services and​ "total sales by​ businesses" includes final and intermediate goods and services B.increased by 0.3​ percent; GDP is a record of the value of all production C.decreased by 0.3​ percent; ​"total sales by​ businesses" are sales of intermediate goods and services D.increased by less than 0.3​ percent; we need to subtract retail sales of 1.3 percent from the​ "total sales by​ businesses" to eliminate double counting E.increased by more than 0.3​ percent; ​"total sales by​ businesses" includes only sales of intermediate goods and services

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Asked Feb 25, 2019
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im having a little toruble with the following question and answer:

The Commerce Department reported that retail sales increased 1.3 percent in June. Net exports were up 0.8 percent in the first quarter and inventories held by businesses rose by 0.3 percent in June. Total sales by businesses rose 0.3 percent.
Source: Commerce Department, 2013
 
Does the statement that total sales by businesses were up 0.3 percent mean that GDP increased by 0.3 percent?
 
The statement that total sales by businesses were up 0.3 percent means that GDP ______ because ______.
 
 
A.
did not change by 0.3 percent;
GDP measures production of all final goods and services and "total sales by businesses" includes final and intermediate goods and services
 
B.
increased by 0.3 percent;
GDP is a record of the value of all production
 
C.
decreased by 0.3 percent;
"total sales by businesses" are sales of intermediate goods and services
 
D.
increased by less than 0.3 percent;
we need to subtract retail sales of 1.3 percent from the "total sales by businesses" to eliminate double counting
 
E.
increased by more than 0.3 percent;
"total sales by businesses" includes only sales of intermediate goods and services
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Expert Answer

Step 1

Gross Domestic Product (GDP):

It is the primary indicator which shows the health of an economy. It depicts the monetary value of all the commodities produced in an economy within a specific period of time and geographical area.

Step 2

The statement that total sales by businesses were up 0.3 percent mean that GDP increased by 0.3​ percent because increase in sales shows consumption expenditure have increased and consumption is a part of GDP.

GDP = consumption + investment expenditure + Governm...

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