Question

For only the second time in the previous 10 quarters, China's GDP grew at a faster rate than from the same period a year earlier. From July through September 2013, China's GDP increased 7.8 percent, but a decline in exports, growing inflation, and slowing growth in factory production all suggest that growth will be slowing down. China has recently been attempting to restructure its economy by moving toward increasing consumption and relying less on exports and investments as a means to achieving more sustainable economic growth. In the first nine months of 2013, 46 percent of growth was due to consumption, 56 percent was due to investment, and exports accounted for negative 1.7 percent.

Source: Aileen Wang and Kevin Yao, "China's third-quarter GDP growth fastest this year, but outlook dim," Reuters, October 18, 2013.

QUESTION:

Refer to the Article Summary. The decline in export growth will hurt China's GDP because

a decrease in exports will decrease net exports, assuming no change in imports.

a decline in export growth indicates an increase in import growth.

exports are added to imports when calculating GDP.

exports are subtracted from imports when calculating GDP.

Answer 1