If an economy declined by 3 percent in one year in order for the economy to return to trend growth within two years, it would have to increase at an annual rate that is
A)less than three percent.
B)equal to three percent.
C)greater than three percent.
D)unknown.

Question

Quizplus · Accepted Answer

To offset a 3% decline and return to trend growth within two years, the economy must grow at a rate greater than 3% annually to not only recover the lost ground but also achieve the trend growth.

If an Economy Declined by 3 Percent in One Year