Math Problem Statement
Assume a country's GDP is $180 billion, and government spending equals $36.9 billion. Most economists in the country note a significant increase in government spending relative to the previous century. They relate the increase to the implementation of efficient automatic stabilizers. In the previous century, government spending as a share of GDP was 2.1% .
Calculate by how many percentage points government spending as a share of GDP has changed relative to the last century. Round your answer to one decimal place if necessary and enter in the box.
Solution
To calculate the change in government spending as a share of GDP relative to the previous century, we can follow these steps:
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Calculate the current government spending as a share of GDP:
Using the values given:
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Calculate the current share value:
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Determine the change in government spending as a share of GDP:
The previous century’s share was 2.1%, so:
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Calculate the difference:
Thus, the government spending as a share of GDP has changed by 18.4 percentage points relative to the last century.
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Math Problem Analysis
Mathematical Concepts
Percentage Calculation
Ratio and Proportion
Formulas
Current share = (Government Spending / GDP) * 100
Change = Current share - Previous share
Theorems
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Suitable Grade Level
Grades 9-10
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