Refer to the graph. The economy begins at a level of output of $20 billion and experiences a one year recession in which output declines by 4 percent. By what rate per year must the economy expand, after it has reached its trough, to return to its potential output by year 3?
A)About 3 percent
B)About 5 percent
C)About 8 percent
D)About 10 percent

Question

Refer to the graph. The economy begins at a level of output of $20 billion and experiences a one year recession in which output declines by 4 percent. By what rate per year must the economy expand, after it has reached its trough, to return to its potential output by year 3? 
A)About 3 percent 
B)About 5 percent 
C)About 8 percent 
D)About 10 percent

Quizplus · Accepted Answer

The Answer of Refer to the graph. The economy begins at a level of output of $20 billion and experiences a one year recession in which output declines by 4 percent. By what rate per year must the economy expand, after it has reached its trough, to return to its potential output by year 3? 
A)About 3 percent 
B)About 5 percent 
C)About 8 percent 
D)About 10 percent

Refer to the Graph