Received a PM asking me to reply. What is the source of this question?

I'm not a big fan of this question - aspects of it don't seem very GMAT-like to me. I'm technically not supposed to reply till we get a source, but I'll discuss briefly because it's been a while since the person who asked me to discuss this sent me the PM.

"whose" is the possessive form of a relative pronoun ("who" is the subjective form). Possessive implies ownership - specifically the noun before owns whatever is after the "whose." "The dog whose tail is wagging is happy to see you." The dog owns the wagging tail. Would it make sense to say that the city "owns" stagnating economic growth? Not exactly - so don't use "whose" here. Eliminate B and D.

A and C have two main differences: the comma (or absence thereof) and "stagnated" vs. "stagnant. This is where I don't like this question much, because I don't think the real GMAT would have these two choices together.

First, A uses a comma after city, so it's telling us that the stuff after city is a nonessential modifier. C doesn't use the comma, so it's saying that the stuff after city is an essential modifier. You can write this either way; it just depends what the sentence is trying to say. Judgment call - and we're supposed to go with the original meaning when there are two possible meanings. So go with nonessential. And as soon as you realize that, the problem is over, because only A preserves the original meaning. Not GMAT-like.

Second, "stagnated" is too obviously wrong. This isn't an idiom issue - they're just making up a word that might be a more common non-native speaker mistake (because the general rule for present perfect is has/have been + past participle, the most common form of which ends in -ed). Again, this is not how the test works - they're not especially trying to trap non-native speakers. Ditto E.

So, yes, A is the best choice on this one. But I don't think the lessons learned here are really the best ones to study for the GMAT.