The question is asking for a percent:
Whenever the answer choices are fractions, decimals or percents and the problem contains unknowns, you can plug in your own values for the unknowns.
For percentage questions, we should plug in 100 so that the math is easier.
Let's say the population starts at 100.
It increases by 6% to 106.
Is then decreases by (.03)(106) = 3.18, so the new population is 106 - 3.18 = 102.82.
Since the population rose from 100 to 102.82, it went up 2.82%.
The correct answer is A.
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