You hear on the evening news:"The economy last year grew by 5% from the previous year, and this was the second year in a row in which the economy showed a 5% growth." This means that, in dollar terms, the economy grew more last year than the year before. State whether this statement is right or wrong.

Question

You hear on the evening news:"The economy last year grew by 5% from the previous year, and this was the second year in a row in which the economy showed a 5% growth." This means that, in dollar terms, the economy grew more last year than the year before. State whether this statement is right or wrong. ​

Quizplus · Accepted Answer

The statement is right because a 5% growth on a larger base (the economy after the first year's growth) results in a greater absolute increase in dollar terms than a 5% growth on a smaller base (the economy before the first year's growth).

You Hear on the Evening News:"The Economy Last Year Grew