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. <u>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. </u>Conversely, if sales and industrial production decline, GDP declines.
