Answer
The second year had a greater PV to start with.
Work Step by Step
$FV=PV(1+rt)$.
The problem text takes PV as the FV of the year before,
and t is always t=1 (we compare a year to the previous year ):
For example, taking 100 units as PV:
After one year,
$FV=PV(1+0.1\times 1)=100\cdot 1.01=101$ units
(growth:=101-100=1 unit)
For the second year, they take PV=101 (FV of the previous year)
$FV=PV(1+0.1\times 1)=101\cdot 1.01=102,01$ units.
(growth: $102.01-101=1.01$ units)
In dollar terms, growth is greater in the second year,
and the reason is:
The second year had a greater PV to start with.
