Hello Rory. Hi. Bye. I'm all but today I just, I feel really like shit because I didn't I went out last night so I did not even wash my face and everything and I'm late, I'm sorry because like I had like a four hour sleeve and I walked off for this lesson show away. Okay okay okay, fine. So basically, I guess you can't turn your camera on today but I get I'm very very luxing today just this one is very I know this is important. It's like really it's bloclean. Okay, okay, it's okay. Okay, okay, okay, cool. So basically we were talking a lot about fiscal especially fiscal policy for the day, right? Sorry can give me a second a second my job is a barking a bit give me 1s sorry. Okay, I don't know if you have any dogs. My dog is insistent in the morning. Okay, so basically we're talking about this. Yeah I have a dog here and where I live. That's really nice. I don't had I have one but I wish I had I may never had one until I don't hear and a half of this never had one growing up but it's quite quite a depends on I mean I mean it's not for everyone but I think that Yeah but I didn't have or I didn't realize you know what having a dog was and and all that and it's just once you have one I think it's really good I think it's something quite gratifying and enjoy a quite good I think at least for from now for for me right better but Yeah okay so basically there's we did a bit of fiscal policy at the end the day, right? On Friday we looked at basically Rori macroeconomics is the macro objectives, okay? And the policy, okay? And you also have to think about the main diagram and there's basically one diagram, right? Adas, okay, so agriagent supply is the classic macrodive, right? So ad is basically an equation, right? It is a mathematical like formula thing. What is ad? Can you give me, give out the formula? Aggregate them all away. I'm looking at the sorry edited the all formula right I mean not Yeah a second. Okay, so c plus I plus domamresponplus X X four minus import. Okay, so c plus I question plus x minus m. So that's basically it. You're quite right. So consumption is c, investment is ig, is government spending and exports minus impples. Okay, so basically fiscal policy. Rory, which of these letters is it trying to alter? Which help these trying to sorry which Yeah so so this is these are variables okay, so all these letters of variables they're not like a constant Yeah so it can change dependent on many different things okay, so fiscal policy has the aim of changing some of these letters okay? Some of these c for example maybe so fiscal policy and other policies other things confidence or monetary policy, supply side policies or if there's only as a trade war, these things have an effect on some of these letters. Again, there are variables. They represent something either changes that can change. So what I'm starting to say is fiscal policy impacts which of these lessons mainly. Is it mainly our government spending? Okay. I mean, Yeah, that's definitely the government spending part, right? Because we said if it's physig and t physiand tonic, right? Fiscal policy is government spending and taxation. So if we think of. We think of government spending fifiscal is equal to government spending taxtaxation is. We can talk about that now, but government spending is g right? For sure, 100%. Okay. So more government spending, higher g, higher ad, right? Pretty simple, right? Right. Okay. What about taxation? What about t? What is the impact of taxation on ad? Sorry, where's about taxation though? You busy gnand t fiscal policies, government spending and taxation. Okay. Yeah. So the t, the tax ductation has an impact on something. That's one of these letters. There's four letters right on the right hand side. So has the impact of at least one of them right here. Well, theory, there's not to any, but I'm telling it impacts at least one, right? So which which of these gets impacted by tedo you think. So in other words, what does tax agent impact? Or does taxation impact the taxation impact. The government inant. I mean, so eventually adrithis devons no, I mean for sure, but forget about the left hand side. So just think about the c Pless side with c plus x minus seven, the right hand side here. So more tax revenue, I mean, or more taxation at least knows we want to increase the tax rate again. We want to get more tax revenue that that I mean, the short really has an impact on government spending as you said, right? But that's like between the letters, let's say, right? So yes, you have more to spend, so you spend more. I agree. But which of these letters and forget G, K, C and I will x minus n, which of these does taxation impacts? And why? Think about taxation. Yeah, I so imagine the tax rate goes up, okay? So the tax rate goes up. Which letter and by letter I mean which variable. They go does they have impacts on the others for short, I mean, the highest tax rate. Imagine suddenly income tax goes up from 10% to 50%. So now you pay a lot more in taxes because you work, you pay more. Well, because you work you pay 10%. Now you pay 50%, which is crazy, really, massive increase. So you get less disposable income every month, right? Disposable income is basically after tax money to spend, right? If less money after tax, what is the consequence on these C, I or x or m? See, I think I'll see. No. Okay, why? It probably has a big impact to. Because actually I can't explain this. Sorry. Okay, but so the tax rate goes up, right, Rory? You suddenly have to pay more. Imagine you work, right? You have to pay more. Will you can see more or will you can see less? I would consume less, right? So that's consumption going down, right? So that's it. That's very simple, right? That's it. So you get taxable. Why would you? Well, you'll spend less because you have less money right? After tax. So after post tax or after tax or we can call ect, disposable income goes down. There's also other things with regards to highest tax in terms of confidence and just wanting to consume less and saving more, etcetera. There's other things involved on a very simple level, worry. You just make money, you get taxed, and then you have the rest. If you make the same, you get taxmore. You have less left over to spend, right? Rrory? Yeah. Okay. Cool. What about I for investment? What do you think is the impact of taxation, investment. What do you think is the main impact? Main impact on investment. And let me think. I think our investment is going to increase. Investment is going to increase. Investment's going to increase if tax goes up. So you're saying so set up. I upgrade. Why? And because. City. Because like tax rate goes up, people tend to invest the money out. So they would like trying to invest the money to save the value. Like not save the not save the value, but you wouldn't want to pay the tax. People always want to avoid the tax. So you paid it by you pay it for Voon, the real estate and stuff. Like at least you hold the money. And Yeah, that's that's actually like a not bad point. It's it in real world, yes, that kind of can happen. So I mean, I gave your point. So imagine you're that. So when we think about investment, it's businesses. So that's and when we think of tax, we kind of think of everything. But the impact on investment, which is a business thing, would be if the tax rate or profits goes up, okay, we call this the corporate income tax, okay? So as you know, businesses make revenue. It's a simplified setting of game revenue and they they have costs, right? Right? And that one minus the other to go to profit, very simple terms, okay? You think it is an account and this is like the the basic basic basics of the basics, okay? So this is you make money off clients, off sales and you have cost supplies and you make profit, which is the difference between both. That's what do you keep it? The corporate income tax is a tax on profits, right? Rory? Yeah. So what gets taxed really? But if you exclude vat get is basically profitable. So you're saying, look, if profits are taxed more than before, shouldn't you? And again, this is actually technically correct accounting rights, but you can think of investment is something to do with costs, right? So surely if the tax on profits goes up from 10% to so let's say it goes up to 20%, surely you would want investor more to reduce your profits rate. Does that make sense? Right? That's what he were saying, right? Yeah. So you should increase your costs. I get that. That's actually a good point. And I'm sure that happens in real life. But the main thing is, Rory, that. If tax goes up, this is really bad. Okay? This is something I'm sure you can avoid it in the short term, like through this strategy you've described. It's hard to avoid in the longer and you'll have to pay it like almost and this is not good. I mean, higher tax rate is isn't something nobody really wants in the economy. Will probably be worse often. Basically what happens? Look, you're a business. You have to let you make you now make less profit, okay? After tax profit, you get tax more. You make less profit after tax profit. Hence you have less money to spend on R&D reset and development or other investment initiatives building your factory. So it's if you just have less money to invest, investing, Rory, is a growth strategy, right? Rory investments at racstrategy. I mean, you don't have to invest to survive this investment. You don't have to buy any new factory. You don't have to invest in research and development, in labs and stuff like that in AI. If you want to survive a kso, it's a first thing that gets cut. So it's very prone to look, if tax goes up, some of the costs goes up. You just cut investment est again. So consumption and investment are very prone. So going down if tax goes up again. So that's basically the crux of the story pgand t fiscal policy, which is government spending in taxation has a massive impact on ad rule, especially through c and I regards to tax and g with regards to government spending. Obviously. Okay, so just in your exam, obviously be ready to draw any kind of ads as diagram. This is very simple. It's just demand mansupply. But with the a in front, this is like simplified version again. And we set this the price level did the day right on the y axis and why which is basically output. Don't be X X. Have you seen the long run agred supply curve brewery like this? Yeah I've I've seen it before with the cup. Yeah. So what is the longer run average? A supply cuff? And the long aggregate supply curve is with the power fly and the short run average, sorry, with a steeper a short run and less steeper, I mean less steep is long run for aggregate demand. Okay. So okay, by the way, this depends like on the school on how you will tour. Okay. So I mean, this is like a very simple as other I'm not actually driven school but differently or there's different ways of doing how did have how have you drawn how have you been told to draw this lrs type diagram? We're going to give it a go. So what have you been told at school? In school easy in school is really our teacher teaches really bad. So that's why like but this kind of diagram or have you done some we haven't actually done something myself school, hate to break it to you, but Yeah, that is my teacher. Okay, okay, fair enough. Fair enough. Okay. So what do you know? You mentioned different steepiness and for sure the lrcurve is not a straight line. So you mentioned different gradients. Why is there why are there different gradients? Different graant. I'm just curious as how much you know just for me to play more or less, what do you mean by different radio like the the steep sorry, the steeper one is. So I'm saying is the gradient is not often on the lrs curve, right? The gradient is higher here than the herate. Yeah. So basically in a simplified setting, you just got ads as two straight lines right here. What I'm saying this diagram is you've got a very almost horizontal curve and then it curves upwards like this, right? And we call this the long run argood supply covering. Yeah how much do you know about this? Just curious to you, I know this is long run and that is short run. Yeah and then the end, the sleep on the Shokay. So that's the thing. There's different ways of drawing it. Okay, so that's that's I don't know which one you use at school, but basically if we take this one here, okay, bottom right, you've got agridemand as usual again and then you've just got lrs ticwe call this lrso forget short. And I take this curve if get this curve here as a given, my question is why is it to the straight line? Why does it have why does it curve upwards at a higher rate all the time? Why is it like curving upwards? Not a clue why is it? I'm always wondering why is it okay? So basically of the following, so I don't know if you've heard of Keynes, the economist, very famous John Maynard Keynes. So okay, if you have a book, have you heard of this guy? I don't think so. Okay, so Keynes was a very famous economist, Cambridge economist. He was based, I mean, wasn't famous, really famous back then, but he was part of the, he was a civil servant and we're actually a mathematician studying mad to Cambridge, then trained as an economist. And he was part of the delegation, the British delegation that went to Versailles. Versailles, you know, I'm sure you have the palace of Versailles in Paris or arca to Paris. And basically the treaty of Versailles was was I actually, I don't know, but I imagine it was conducted in this area, okay, physically. And it was just after the First World War again, and it was a treaty that basically settled and wrote up the peace deal after the war, after the First World War, in 1918, and John many, the kings was part of the British delegation that went to negotiate the treaty with Germany, who lost, and the osha Hungarian Empire again. And as you know, when you win the war, you're basically able to dictate the terms typically again. And the terms were basically to really hit Germany hard and make them pay a lot of money again in reparation payments to make France pay a lot. So it make Germany pay a lot to France and to the allies. And Caynes was part of the British delegation that went to negotiate this treaty. Was he kind of quite Young back then, but he then wasn't that famous then. He wasn't famous to toanything thing. But he was very critical of this, of being of this piece where Germany was made to pay a lot of money, basically, very almost perhaps too much. The allies were extending themselves too much. And he wrote a famous book about this at the time, about 1919, something like that, 1920, after the treaty, he came and he then rose to prominence in the uk during the Great Depression, twenties in America, Rory, which we've probably heard of as a very like buoyant good time for the economy in the us, right? 19 twenties. Yeah, I think so. You have the Roaring Twenties in the us. Have you heard The Great Gatsby? It's a famous, I think Yeah it's a famous book and a famous film as well. Recent film, this what I sure rely absorother versions of the film. But basically the 19 twenties was the time of, let's say the us economy is doing very well becoming the superpower. And the more on superpower after the war and numeric's doing well, and then there's a Great Depression. You've heard the Great Depression and will the Wall Street crash, right? It's in 19 something more or less. Yeah. So have you heard of the Wall Street crash maybe? Yeah, I think 19 five. Yeah, yes. And wall crash was round about there. She was 19, I think 1929. And then the Great Depression was the crisis that came afterwards. Typically it's like an event and then it's like a real economy crisis where people like lose their jobs and love unemployment in America. Okay. And there different policies that came afterwards. Again, Keyes was very supportive of the New Deal again, and the New Deal, the New Deal was basically the idea that the American government, or what happened was the American government started spending a lot of money. So g went up draumatically, so if g goes up, ad goes up, the economy does better, right? So that was a theory. Governments spend a lot of money during this recession, during this Great Depression, to employ people to try and make the economy work and kind of continue working. If people were unemployers love, MaaS unemployment, lack of confidence, the government should come in, step in and kind of boost the economy. That was just thinking, okay. So John Man cawas very supportable. He saw back then like that America did promote what they called the New Deal, which was this stimulus package that wanted to stimulate the economies regarding government spending. Okay. And Keynes basically made his economic kind of theories known supporting this. And he would base a lot of his work on this. Keynes is most famous for justifying a government spending in times of recession, became most famous for that by far, and he would justify government spending in recessions. He then was kind of forgotten for some time and rose to prominence again after the 2008 financial crisis where a lot of countries began stimulating their economies during the recession that came after again, wanting to rete employment and their economy ies again. However, a lot of European countries were actually entered what we called austerity. So a lot of countries did not spend their way out of the crisis. There wasn't a lot of stimulus. And our people would criticize that this stunt, especially the European Union, saying, Keynes would have said, you should stimulate your economy. Keynes would have said you should spend a lot of money to stimulate the economy. King, so as you can see, Rory, Keynes is a guy that economists very famous for supporting the royal government of government spending again. Yeah. Okay. So canes. It's the role of government spending, especially in recessions. Okay. Let me show my show you the. And it's easiest if I show you picture up choice, maybe you've seen the guy. Let me share my screen. Can you see this? My screen, this is the jmankings again. He died a little. I I've seen, I've seen his picture before. Then 46, straight after the World War, World War Two. Very famous guy. Was kind of forgotten for a long time. Civil servant based in the uk and an economist at me. I don't think he was down famous to be honestit's of an intellectual book. But don't think you're more famous now, I think, right, very famous now, especially after the crisis. Okay, so. Mark, so there's a Versailles Treaty. And he wasn't famous here. He was just very quite Young with think relaadily Young. So a Versailles Treaty was treaty signed or irated, the treaty that dictated the terms of the peace after First World War, which end in 1918. So he was here, right? He was part of this delegation, okay, in Versailles one. And as I said, it's the palace, right? Very famous palace. And parand then there was a Wall Street crash in between. He wrote his books and he became quite prominent as an economist. And one was the treaty kings. Yeah. So this is the, he wrote a book on on the treataties, depending on the treaty. Okay? And then he wrote a book called something like the general theory, okay? It's a very famous, but okay, this is kind of in the period in between. And then there was a Wall Street creaction kwhich kind of justified a lot of what he said to some extent, or at least it was shown that this was something could happen. So a Wall Street crash and find that not something predicted or anything that wasn't at the point. So as as you've probably seen, Rory, the pictures of Wall Street crash car salyou've probably seen these kinds of pictures, right? Yeah. Have you seen this kind of picture before? Like a lot of people selling that, even stobrokers that worked on ball street selling their car for $100 or I think so. Yeah, I think I've seen it before. Yeah. You've probably seen stuff like, is everyone like, well, maybe this is we check out those other famous ones, Wall Street crash famous pictures. I don't know why there's always that one, but stocks crash. A lot of people committed suicide and not fun at all. But I mean, it was, it was a big thing. I mean, the the stock market was going up tremendously and it was wasn't a bit of a bubble properly. Okay. And then it crashes. Okay. So Wall Street crash. Okay. Then there, then there was the real economy crisis. This made it, this then became a crisis that affected the actual economy, not just a stock market. So this is a very famous picture. I'm shouldn't come up straight away. This one, you've probably seen this picture before. This is one of the most famous pictures. Yeah, very depression. Okay. So this was a really common crisis that affected a lot of people that werenemployed now all of a sudden, again, so what happened after this was the government spent a lot of money to try and stimulate the economy. And this was what Keynes would have always said himself. Not saying Keynes was the person behind this, but he was always very supportive of this kind of policy, would have been very supportive of this policy. He was in the uk. This was an America. So it wasn't canes to so like, work is what I want and not charity. People will help me. A lot of people, these signs that these favorite place are very famous too. Hoover was president of the time, was more his right wing. He was not in so much in favor of the stimulus. The next president was the one who was very much more in favor of the stimulus, who I believe was really Roosevelt to Roosevelt then came to Powell as the one that set the set the New Deal. Yeah. He was a president until he died in a 1945, I think, right, right at the end of the World War Two. Okay, for a New Deal, okay. So he, the New Deal roory was a concept of spending money to stimulate the economy. So Roosevelt, tha New Deal. Okay, this picture on the right here. So there's lots of certain work programs, again, at wpm and different names for different types, programs worth, that would build a lot of infrastructure, not the infrastructure that the American has now was built during this period. What why what do you think is is the reason why they suddenly spend a lot of money on infrastructure? What do you think, Roy? Because they wanted to cite spending money on infrastructures like more more of like just sustainable economic growth. Like you can have like more sustainable economic growth for sure, but what why a time of crisis? Do you want to spend a lot of money on just random infrastructure projects? What do you think. See him think. Why would you spend on massive dams and roads and railway projects and bridges and all these things in a time of crisis? What's the main purpose? Name, purpose. So why why are you building? What do you need to build these projects? Build different thing. Yeah you have money but you do you print it might call the place or you just have it or you borrow it but you spend it. Okay. But what do you need it? What's the point? What's what's the main point of this? It's not to have the bridge. I'm sure the bridge has served some purpose. The bridge that you build. But what do you get in between? What are you getting out of it more and more mediates. Employment radio employing people, that's the main thing, right? Yeah sorry, I you're employing people, right? You're employing people and this is what Keynes would have said again. So getting back to Keynes, so Keyes had nothing to do with this different country, pretty sovereign country, the us obviously. But Keynes would have said in the crisis, you should employ people. The government should employ people basically not like directly, but just build projects and then these projects require people. So you will be employing people directly or okay, so kenes would have said spend money in the crisis and save money in the boom. Okay, Rory? So save when you have a lot. So the government should save, should run surplus, a fiscal surplus. Okay. In a boom. So tax revenue should be higher than government spending. And in a crisis, government spending should be higher than taxation. Does that make sense, Roy? It's kind of saying, ry, you save for a rainy day, right? So you save when you're doing well and you spend when you're doing less well. Looking and the longer run out with supply curve, okay, that looks something like this, like that basically what it's saying in a crisis, you're downhere on the wood is like almost the horizontal part of the curve. This bit here, do you see it on the left of the curve? Yeah. Here the long narsupply curve is almost horizontal. Okay. What this means roaring is that any attempt of fiscal stimulus at aga demand going from ad to ad one, for example, what happens on the diagram? What changes do you see on the diagram going from this point to this point e to E1? What changes do you see? In terms of price level and in terms of output on the next axis, price level staroughly the same, okay, but output significantly increases for sure. Great. Is that a justification? Right? And when there's a lot of spare capacity, and this is a big word, a big term, it's spare capacity and there's a lot of, let's say, opportunity to, sorry, as in there's a lot of resources that are idle and used, a lot of unemployment, a lot of machinery factories are not being properly used. If you stimulate the economy and you start spending a lot of money to go and start spending lot of money ad shifts out new deploworkers et tera, this is going to cause a big increase in the wine output, which is great, which is what we want, and a very small increase in inflation. It's not going to be inflation and you identify that correctly. That's good here. However, if we have a same similar kind of movement, okay, an ad ad to 81 here. What is the change in this case, Rory? The change at this point is both both price and little output are actually mostly priced. Maybe output change a little bit 100%. So just just down to like the gradients and the change the change here, if the line is almost vertical, it's going to be tiny. Change in wires can be small. The oops, but the change in the price level is going to be huge, right? Very inflationary. So what this is representing is that down here, we were in a part in area like spare capacity. In a lot of, let's say we're in crisis, we're not using a resources properly or enough or at all. There are resources that are I don't think people are at home not working spare capacity. And here we're at full capacity. Okay, closer to the vertical line, we're very closer to full capacity. So here close or whether the line is almost vertical. Rory, do you think government spending can be justified? So a lot of government stimulus. I don't understand the question. So we basically said, and we've quite said that when the light is horizontal, okay, the lrs light, let me pick a different color. We add ras labas, this one, right? Okay, it's almost vertical, thone's, almost horizontal, which is bdown, okay, closer to the origin. You said any change in ad would cause a big change in why and almost an insignificant change in the price level and inflation, right? However, when it's almost vertical on the top right, it's going to increase the Press level a lot and output will barely increase. Yeah. So what basically this diagram is saying, this is the Kees invenent of this line or diagrathis representation, is that there's a there's role for God, there's a role, there's a part to play, okay, for the garto play in a recession, but not in the boom. In a boom, there's no point for the government to step in. It's just going to increase inflation. So basically canes. Kendom said that there is no. No no rock, no real. So no real. For excessive. Government spending in a surthe boom. But a massive. The government, okay. Now to spend a loss in a recession, g is part of the ad equation. Okay. So this is what we call expansionary fiscal policy, right? Yeah expanfical, what's the opposite of expansion fiscal policy? What's the opposite. Contrationary, right. So expatory fiscal policy above always g up, okay, government spending up adown, that's what we could go to call expansionary again and contrtionary. Would contraction be contrtionfrom t to g down t up? Yeah just the opposite, right? Yeah Yeah. So you want to. You want to spend very little or spend less, okay. And increase the tax rate, increase tax, okay? Obviously, it doesn't have to be like both pointing in one way. Like it doesn't have to be that you when you want to run expatory fiscal policy, you want to spend more. I mean, that doesn't mean you have to bring down the tax rate. I mean, not necessarily, but it's just think it's magnified if you do. Right. Okay, so this is kein 's case saying government has a role to play in the recession and role in terms of spending. Would you then think Rory Keynes is a more of a left wing or right wing economist, right way economist? Give this a think. Give this a think. I probably left me, but I can't explain the reason. How you explain the reason, please. But why? Like this is quite simple. Right? Really? Why? Why left wing? I agree. Why left. So then what do we think is left wing? We obviously, these are big stereotypes relike, what does left wing kind represent? Like, what is it? What does that mean? Kind of termine open policy. For example, like like liberal also liberalized. You expand on that like a left wing politician. Oh, sorry, left doing wing tend to be more no, actually, left wing tend to be more socialist and right wing tend to be more like capitalist and more like competition. And your left wing tend to give like poor people more like money and tend to have high taxation. Okay, so what would okay, so what would roucanes have been? So pris, so that's already left wing. Why? Okay. Okay, so so why would canes have been left wing, do you think. What is the main thing that he kind of was all about that kind of gives it away? Because he supports government spending. Yes. I mean, that's the big one. I mean, he's very much different government spending in recession and a lot of government spending. And that by definition makes government big. So left wing is it prefers a big government. The more obviously this goes beyond just spending again. But the left wing would typically kind of support a bigger role for the government to get. The right wing would support a more of a reduced role for government ticket. So cave was very much a left wing economist. And a lot of the political parties on the left these days are very much quotes and support with kbasically theorized, that's why he became very famous after the crisis of 2008. Again, a lot of parties, left on right were basically quoting and taking a lot of his ideas on board, again, as justifications, as economic like theoretical justification for a lot of the stimulus they wanted to do. Cool. So basically, I think it's really important to really understand fiscal policy. Rory, okay, fiscal policy is one of the three, one of the two policies you should really know for a level. And then we talk about monetary policy. So it's fiscal, monetary policy, fiscal policy. Think about the diagram, the ads as diagram. Think about lras and what they representersuggeyou revise this, Rory, and a lot of this in the texbook. Take a look at your textbook here is there's some textbook work to be done, okay? And just think about the impact on ad, okay? All these policies or monitoring fiscal are ad driven. The impact ad, okay. The demand suppside is the suppside, as the name suggests, okay? So you should really understand the impact on the different variables in the ad equation. It's all the same thing, right? Just c plus, c plus x minus seven. You just have to understand the impact on these again. Okay. Do you have any questions? So you can we've got a few more minutes. Do you have any questions? No, I don't think so. I think I've got it. Yeah, okay, fair enough. We can continue hnow the next few minutes, tunit or tunit to have a few minutes the next time. I know you might be a bit tired, but up to you, up to you. I mean, we can do something until like until ten. Yeah. Do you have any questions? Do you have any ideas as to anything? Any feedback from your side? Because I feel like to my general feedback for you would be roi think I'm not saying today, okay, but I think you'll be good if you kind of invest more in these lessons, right? If you are more, not saying prepared, but if itbe really good, not just the camera, but itwould be good for if you interact a bit more with me again, because I feel that you know more than what you like. Give me if that makes sense. Ryeah, that makes sense. So I think I'll be good if you can. So what I'm saying is very simple, and I think you do know it. Okay, we've just we've just been talked about ad and the impact of government spending, a taxation on ad. That's basically what we've been talking about today. So itbe really good if you review this, if you can. And for next lesson, Rory, please review monetary policy. Thatbe great again. So monetary policy is what? What do you understand by monetary policy? Monetary policy. It's tax, sorry, tax it's not tax policies money, is it? Government spending policy and fiscal policy cies tax taxation policy. You said fiscal policy is Fig and t government pentaxation. So monetary policy is not that it's not nothing to do with government spending on taxation rate. Oh, right. What is about them? So what is give me some ideally. What does monetary policy refer to? What kind of concept are we talking about? Monetary policy refers to. What's the first thing that comes to mind? Like monetary policy? Money, money, money. Okay, very enough. And what about money? What about money? What is it about? Like I got got government spending money. I guess that's fiscal going back to fiscal, but definitely money. Okay? So what I think about monetary policy is I get money, fine, it's in the name. So then money is imprinting money, right? And the price of money, okay. These are the two main thing in regards to monetary policy. Monetary policy. Monetary policy is. Just easy money supply, okay? And the interest rate. Okay, that's it. Monetary policy is adjusting money supply accordingly, so making decisions as to money supply. And then secondly, and probably most importantly, is the price of money dictating the price of money? The price of money is the interest rate, right? Oraring, so I can lend to you, but as a price, again, that's I want to charge interest. So the price of money, the price of me lending to you, rit, if you want or need some money, is the interest rate again after the price. So monetary policy dictates the interest rate of money supply. What is the interest rate in general? The interest rates in general is different types of interest rates, right? Like what is it what does the term interest rate mean? Where have you seen an interest rate? Like which walks of life do you see an interest rate? Yeah. You go to the bank and you want to borrow money, right? It's just the price of money is I say it's just the and this change depends on a lot of things. Again, so monetary policy dictthe interest rate broadly in the economy and the money supply. So we'll talk about this next time for next time, Marie, can you please review monetary policy on your own, if you can? Sorry, I just did really revise for like I'll do you like next time before the lesson. Now get ready with this. I'm like today ready with the first part of the last. Okay, I'd be great if you can just review fiscal and monetary policy. Okay? Yeah, it's especially monetary policy. We'll discuss it and just switch your camera on next time and maybe you have a good return to school. Okay, thank you. And see you next Friday. Okay, see you next Friday. Yeah. Okay, thanks goobye. Thank you. Bye.