Concept:
When four terms $a, x, y, b$ are in a Geometric Progression with a common ratio $r$, they can be written in terms of the first term $a$ as: $a, ar, ar^2, ar^3$.
Step 1: Express the variables in terms of a and r.
$x = ar$
$y = ar^2$
$b = ar^3$
Step 2: Expand the given expression $(x+y)^2$.
$$(x+y)^2 = (ar + ar^2)^2$$
Factor out $ar$ from inside the parenthesis:
$$= (ar(1 + r))^2$$
$$= a^2r^2(1 + r)^2$$
Step 3: Test the given options to find the match.
Let's expand Option A: $(a+x)(y+b)$
Substitute the variables:
$$(a + ar)(ar^2 + ar^3)$$
Factor out $a$ from the first term and $ar^2$ from the second term:
$$= a(1 + r) \cdot ar^2(1 + r)$$
Multiply the factors together:
$$= a^2r^2(1 + r)^2$$
Since this exactly matches our expanded expression from Step 2, Option A is correct.