You hear the following on your local radio station's business news: "The economy last year grew by $3\%.$ This was the second year in a row in which the economy showed a $3\%$ growth." This means that, in dollar terms, the economy grew more last year than the year before. Why?

The economy last year was equal to the year before; $3\%$ of last year's economy is the same as $3\%$ of the year before.

The economy last year was smaller than the year before; $3\%$ of last year's economy is smaller than $3\%$ of the year before.

The economy last year was larger than the year before; $3\%$ of last year's economy is larger than $3\%$ of the year before.

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