The Shrinking Rainy Day Fund.On October 5, 2015 The Boston Globe published a story headlined "state's rainy day fund has dwindled over past decade" that said (in part):In the summer of 2007, before the massive recession began, the rainy day fund had $2.3 billion--a cushion of about 7.8 percent of total state spending, according to the taxpayers' foundation. This summer, the rainy day balance stood at $1.1 billion--about 2.7 percent of total state spending, a fraction small enough to raise a red flag for analysis. Calculate total state spending as of the summer of 2007 and this past summer (2015).

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Asked Sep 25, 2019
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The Shrinking Rainy Day Fund.

On October 5, 2015 The Boston Globe published a story headlined "state's rainy day fund has dwindled over past decade" that said (in part):

In the summer of 2007, before the massive recession began, the rainy day fund had $2.3 billion--a cushion of about 7.8 percent of total state spending, according to the taxpayers' foundation. This summer, the rainy day balance stood at $1.1 billion--about 2.7 percent of total state spending, a fraction small enough to raise a red flag for analysis. 

Calculate total state spending as of the summer of 2007 and this past summer (2015).  

 

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Expert Answer

Step 1

Calculation:

Compute the total state spending as ...

S2.3 billion S2.3 billion _ $29.49 billion
0.078
7.8%
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S2.3 billion S2.3 billion _ $29.49 billion 0.078 7.8%

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