Which factor in the calculation of GDP would cause economic growth?

A) decrease in exports

B) decrease in imports

C) decrease in investment

D) decrease in consumer spending

B. decrease in imports

Explanation:

The formula to calculate GDP is: GDP = C + G + I + X - M

In that, C stands for consumer spending, G stands for government spending, I stands for investment, X stands for exports and M stands for imports.

As indicated in the formula, consumer spending, government spending, investment and exports are directly proportional with GDP. So that when there is a decrease in these factors it would result in a decrease in GDP as well.

Oppositely, import is inversely proportional with GDP, thus a decrease in import will lead to the increase in GDP, causing the economic growth.