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Compare the level of Gross Debt per Person from 2007 to 2019 and outline one possible reason for this increase in the gross debt per person. - Leaving Cert Economics - Question 7(a) - 2021
Question 7(a)
Compare the level of Gross Debt per Person from 2007 to 2019 and outline one possible reason for this increase in the gross debt per person.
Worked Solution & Example Answer:Compare the level of Gross Debt per Person from 2007 to 2019 and outline one possible reason for this increase in the gross debt per person. - Leaving Cert Economics - Question 7(a) - 2021
Step 1
Compare the level of Gross Debt per Person from 2007 to 2019
Answer
From 2007 to 2019, the gross debt per person in Ireland increased significantly. Specifically, it rose by €30,322 per person, which is a substantial increase of 272%. This period reflects a critical time in Ireland’s economic history, particularly influenced by financial challenges.
Additionally, when examining the sub-period from 2007 to 2013, the gross debt per person surged by €35,742, while from 2013 to 2019, the gross debt per person fell slightly by €5,420, or 11.6%. This showcases a trend where the majority of the increase in debt occurred in the earlier years, correlating to economic instability.
Step 2
Outline one possible reason for this increase
Answer
One key reason for this increase in gross debt per person can be attributed to the economic recession that occurred from 2007 to 2013. This recession was primarily fueled by a housing bubble and a financial crisis that necessitated government intervention. As a result, the government had to bail out several banks and nationalize others, leading to substantial increases in gross debt per person. This financial burden significantly impacted the overall debt levels, reflecting on the per capita figures.