Which type of growth results from a fixed percentage increase per period?

• A. Linear growth
• B. Exponential growth
• C. Logistic growth
• D. No growth

Answer: (B)

Exponential growth happens when every period you increase by a fixed percentage of the current amount. That constant multiplier makes the quantity grow by larger and larger absolute amounts over time, because you’re always taking a percentage of what you have at that moment. This is the hallmark of exponential growth, seen in populations or investments with compound interest.

Linear growth, by contrast, adds the same fixed amount each period, leading to a straight-line increase. Logistic growth starts fast but slows as limits (like resources) bind it, approaching a plateau rather than continuing to rise at a constant percentage. No growth means the quantity doesn’t change at all.