Question

The us federal debt at the end of 2001 was 5.77 trillion and gre to 6.20 trillion by the end of 2002 at the end of 2005 it was 7.91 trillion and grew to 8.45 trillion by the end of 2006 calculate the absolute and relative increase for 2001-2002 and 2005-2006 which year saw a larger increase in federal debt?

Answer 1

2001-2002

Absolute increase: 0.43 trilion

Relative increase: 7.45%

2005-2006

Absolute increase: 0.54 trilion

Relative increase: 6.83%

In the period 2001-2002 it is the larger increase in federal debt as a percentage and in terms of money, the larger increase was the period 2005-2006.

Explanation:

The absolute increase is the difference between both values and the relative increase would be the percentage of increase between the values.

Therefore, we calculate both increments in both cases:

Period 2001-2002 (in trillions):

`\begin{gathered} I_A=6.20-5.77=0.43 \\ I_R=(6.20-5.77)/(5.77)\cdot100=7.45\text{\%} \end{gathered}`

Period 2005-2006 (in trillions):

`\begin{gathered} I_A=8.45-7.91=0.54 \\ I_R=(8.45-7.91)/(7.91)\cdot100=6.83\text{\%} \end{gathered}`

Therefore in the period 2001-2002 the absolute increase is 0.43 trillion and in the period 2005-2006 it is 0.54 trillion.

But the relative increase is 7.45% and 6.83%, respectively, therefore we can say that the larger increase occurred in the period 2001-2002 percentage and if we take into account the numerical value, the value is greater in the period 2005-2006, therefore in terms of money the increase is larger in this period