Greece is currently experiencing a financil crisis a. Research the financial cri

Question

Greece is currently experiencing a financil crisis

a. Research the financial crisis in Greece and summarize it in one-two paragraphs

b. You are in charge. By what percentage will you tell Greece to cut their spending? What is the Decay?

c. Write a function modeling this debt situation if the initial debt in 2009 was $500 billion and using decay factor found in (b). Let y be measured in billions of dollar and x represent the number of years since 2009.be debt-free if you are in charge? Should you reconsider your answer to (b)?

d. When will Greece

Explanation / Answer

Lets say to get out of the debt ridden situation we need to cut down the spending by 20%

percent decreaseof Greece’s spending is 20%

Deay factor 1 - 0.20 = 0.8

As Greece reduces its government spending, experts predict that the country’s debt will decline. Imagine if the country’s annual debt could be modeled by this function:

y = 500(1-.20)x, where y is in billions of dollars, and x represents the number of years since 2009

y = 500(0.8)^x where x is the number of years since 2009

Year     Debt ($ billion)

2009 ----- 500

2010 ----- 400

2011 ------ 320

2012 ------ 256

In cae=se of pressure to reduec the debt at a faster rate we might recosnder decay factor and

consider decay factor = 1-0.3 = 0.7

So, y = 500(0.7)^x

So, 2010 --- 350

2010 ----- 245

2011 --- 171.5

So, we can see the difference between the remaining dbet in case of different decay factor , whenthe decay factor is 0.7 , we are able to reduce the debt at a much faster rate.

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