By 2017, federal revenue is projected to increase about 50% from the 2012 level

Question

By 2017, federal revenue is projected to increase about 50% from the 2012 level of $2.42 trillion by 2017 spending is projected to increase by 21% from 2012 level of 3.53 trillion. How would these changes affect the 2017 deficit compared to the 2012 deficit By 2017, federal revenue is projected to increase about 50% from the 2012 level of $2.42 trillion by 2017 spending is projected to increase by 21% from 2012 level of 3.53 trillion. How would these changes affect the 2017 deficit compared to the 2012 deficit

Explanation / Answer

In 2012, the federal revenue is 2.42 trillion and spending is 3.53 trillion.

Deficit = 3.53 - 2.42 = 1.11 trillion.

In 2017, revenue is expected to increase by 50% and spending is expected to increase by 21%.

Revenue = (2.42 * 50%) + 2.42 = 3.63

Spending = (3.53 * 21%) + 3.53 = 4.2713

Deficit = 4.2713 - 3.63 = 0.6413

Deficit will decrease by ( 1.11 - 0.6413) = 0.4687 trillion in 2017 compared to 2012.

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