lecture: domestic and economic policy.

In this lecture we're going to cover domestic and economic policy. So if we think about the need demand response model, this is the response that governments have to societal needs in the broadest sense. So remember that the role of government, they are the steward of the public good. They are both public goods and private goods. Public goods are those things that should not be restricted or private, but everybody should have access to. Whereas private goods could be owned by individuals and or entities. The public sector is that sector that facilitates this process, that ensures the public goods. But it also facilitates the sector by which private goods can be obtained. In a free market capitalist system, the private sector, that means, has some influence by the public sector, especially when there are things like market failures or externalities. And the voluntary sector, a sector that is neither public nor private. It in many regards, is a sector that is not about for profit, but for to serve the community or society as a whole. And the voluntary sector often is associated with non-profit groups that are doing charitable works. But it also includes things like unions, as well as many other areas that would not be in the public sector nor in the private sector. Recap on economic systems is that we have a primarily capitalist system in which most of our economic activity is done, in which it is privately owned.

And it is not a socialist system where most of the activity is owned by the state. This would be a system where the state would own large entities such as large corporations. And we would work for the entity. The entity in, in essence was the state. Going a step further from socialism? Is communism. And with communism, the system is that the state owns everything that we are all working for, the mutual benefit of the state. And we get basically the same amount, whatever we need to survive. So that's, that is often what we refer to as communism. And it's authoritarian is, as it evolved in the Soviet Union, in North Korea and in China. While China has moved away from a Socialism, extreme socialism, communism to a mixed capitalist system. They still have an authoritarian system. Mercantilism is a system that pre-dates capitalism and these other systems in which the state or the king would facilitate power through controlling of raw materials and products and through empires and such. And with that, whoever controls the money, the goal, the power, controls the power in the system. And if not necessarily a free market system, it can be done through many different mechanisms. So the making of public policy to address societal needs starts off with what we call Agenda Setting.

The political agenda are the issues and concerns that the public has. And eventually, if these issues are important enough, they will make it to a legislative agenda where legislative bodies like Congress, state legislatures, county commissions, city councils, or even school boards will effect a policy change that will try to address that need. The second phase of making public policy is formulating that policy. So once it's on the agenda of the legislative bodies. Then they have to write the legislation. And there's two main types of legislation that they will let, right? There's authorization that is giving the state or an entity the right to something. And the second is appropriating funds if necessary, to accomplish a given task. So quite often, if you don't have these things going in tandem than the need that isn't necessarily met. Once the legislation is passed through the legislative branches than the executive branches will implement such policy. And if they're doing this effectively, they will evaluate and analyze the policies that they fast to see if they worked and be able to determine whether or not they need to change those policies or eliminate those policies if those policies did not fulfill the desired outcome. Quite often though, between elections and so forth.

Things are changed, not necessarily because of policy valuation analysis, but because of politics. But that's usually the bigger end things. Once it's in a department or an agency, they regularly Willy be evaluating it because they have limited resources and they have to figure out where to allocate such resources. And if something is no longer working, they'll have to eventually eliminate it. However, that can be a slow process. So for instance, it wasn't until the 1880s that the US military got rid of its cavalry division that was based on horses. And we had been, the last war that the Calvary was being used in was really World War One. In terms of facilitating growth in addressing needs in the economy, the government has three policy tools. They have monetary policy, which is about the money supply.

They have fiscal policy, which is about taxing and spending. And then they have regulatory policies, the ability to regulate industry and banking. All three are very important in a modern capitalist society, although they haven't always been. In fact, for much of the history of the world. The role that government played in terms of monetary policy, fiscal policy, and regulatory policy was very limited. It's only in the last hundred years or so in the United States that we've seen this evolution. And that was because of the massive disruption, because of severe economic downturns like the Great Depression, which led government to figure out ways that it needed to overtly try to prevent such severe downturns. And if they did occur, how could they help facilitate a quicker recovery that had less impact on people than what was happening during the Great Depression. The Great Depression was so severe that it lasted so long that people were starving. In the streets of the United States. The entire economic system was on the brink of total collapse. And that would lead to not only a lot of misery for the citizens, but it could lead to the total collapse of the state and the political system which could ripple through. And what we do know about the Great Depression is that it did lead to many rise of authoritarian leaders in Europe. And many of us scholars believe that without that economic downturn, you wouldn't have seen the rise of fascism. And potentially, you may not have seen World War II as we did in that era. So governments, in one sense, have a role to play to promote economic growth and economic well-being of their citizens. And that is obviously very important. It's very important that the government is able to try to create some stability. And this is also a challenging thing to because especially in a capitalist system where government is not expected to play a role like in a communist system where you have a command state, economy, where the state controls everything.

Here, the government has to limit its footprint on the economy in order to incentivize growth and opportunity and risk-taking so that the economy will grow. With that though you create some times when there's instability and it allows things to break down. So it's a constant game of shifting to try to ensure economic growth and stability. So. There's various cycles in the economy. There's booms or bull markets, as it's referred to, where there's significant growth. There's an area of growth which keeps up with inflation. So that means if you're in a period of time where you're getting 3% more every year, the cost of your products that you're getting, that you're purchasing are not outpacing your growth rate in terms of your income. Presently, We're in a low-growth environment where inflation is rising faster than wages and incomes and so forth. And it's putting a real pinch on people. And that is something that we have not experienced in nearly 40 years. And much of that has to do with things that are not necessarily totally within the control of governments. Especially in a global economic world, and especially with the consequences of things like the COVID pandemic wars and so forth.

We'll talk a little bit more about that. Shortly. Then there's a period of, of, of basically a reduction in economic growth. That's called a recession. In which if you have three-quarters where there are less goods and services produced in the economy, that is considered a recession. There's a period of stagflation where prices go up, but there is no growth. And that's what we experienced in the late 1970s in the United States. And then what we consider the worst economic downturn is a depression. These are, these are not, when we talk about cycles of the economy. You don't go from a depression to significant growth automatically. In fact, these are not necessarily go 1234 down the road and then go back up. You could be going from significant growth to low-growth, back to significant growth. You go from recession to depression or vice versa. So there's no correlation in order of these. But these are just different phases within, within an economic cycle or the economy. And depression is usually happens when there's severe economic downturns. Well beyond what a recession is. Generally it doesn't mean stagflation because what ends up happening in a depression is that people do not have money to buy things. So we actually get a deflation in which goods prices drop. But it doesn't necessarily inspire when prices dropped for people to buy things because they still don't have any resources. Severely, severe unemployment happens during these periods of times and it often bleeds into incredible amounts of political instability. So how does the government tried to manage the economy? Promote growth, what it wants his growth, significant growth. When you have booms can often lead to bus because if the wages are taking off and then demand for goods exceeds the supply, that can lead to economic instability. In fact, part of what we're experiencing presently is just that, that because of coming out of COVID and people want more products and want to go and do more things.

And we're at full employment. You have a situation where the cost of goods continues to rise faster than the rate of which people can necessarily afford. Eventually, it would take care of itself. But if it isn't, if it isn't managed correctly, it could lead to a severe recession. It could even lead to stagflation and ultimately could even lead to a depression. If basically the system prices itself out, you basically have a spike in, in costs. People spend as much money as they can to buy what they need. And then at a certain point, they have no more money or left or an income and therefore you get a rapid deceleration in decline. And therefore that could lead to a potential depression. So going to the areas by which government plays a role, the money supply is really one of the biggest areas much at the time and this goes back for generations. Money is printed and controlled by governments generally. And the more money that's out there. The more people technically can purchase goods. However, if the money, if there's so much money out there at, leads to inflation. And inflation can eat up even the money that's out there. So what the federal government does in the United States is they control money supply most directly. With the Federal Reserve System, which is a quasi governmental system of banks that lend money to banks. And they control the amount that this money that they lend out through interest rates, short-term interest rates. And the higher the interest rates, the more expensive it is to borrow. And therefore, it creates a situation where there'll be less money in circulation.

If it's more expensive to borrow that money. The other way they could do this is they could decrease those rates so that they, they support borrowing. When there's an economic slowdown and potentially deflation, the government will try to do that. So they're trying to make sure that there's enough money in circulation. And they're trying to manage inflation and deflation. That's their main way using the money supply through monetary policy. They also have a secondary mandate and that is full employment. So sometimes that can rub up against each other and make dilemma. And that's what we're experiencing right now, where unemployment is really low. Interest rates were low because of the pandemic and previous to that, because of the 2008 financial crisis, some of the lowest we've ever seen. And we're trying to spur on economic growth. But then we came into this era that we've started to experience more recently, in which that providing products to people has led to an inflationary spiral almost where we're seeing 78, 9% inflation month after month. And that is hitting people in the pocket book when they go buy gas, when the boat go buy groceries, when they want to buy a car and so forth. Where it's eating up their savings if they have it, many people can't afford to buy things that they want, and that in essence leads to economic instability as well. So what does the Fed trying to do in terms of this inflation cycle is that they're trying to take some of that money out of the system so that people stop buying, stop borrowing. In essence, let the economy cool off a little bit so the supply can catch up. So right now, demand is very, very strong and supply can't keep up. And it can't keep up for a couple of reasons. One is the demand, but two is they don't have the workforce. And then the third reason is that we're in a global economy where our supplies are not just produced in the United States, but they're produced globally. And we've got global impacts that are created because of wars. And COVID, in particular, that have, have impacted the supply of goods. If you look at this chart here, it shows you the historical Fed funds rate and this is what the Fed basically sets in their meetings. They have multiple times a year. And as you can see at the very far right here, there has been an uptick. It was flat, it was at 0% because of COVID. They dropped it because they didn't want the economy to go into total freefall. It did because of COVID, we had to shut down the economy in March of 2020. And they kept that funds rate basically at zero. Basically, banks could borrow from the Federal Government with no obligation other than paying back that principal. And because of inflation that we started to experience in 2022, they have bumped that funds, federal funds rate up to almost 4%.

I think it's over 4% as of the time of this lecture. And they expected to even go up higher to try to drive down inflation, to try to do it. And we have experienced Fed funds rate much, much higher in the 1970s and early eighties. It was as high as almost 19%. And that was because we had this period of stagflation in which we were not able to control inflation. And as you can see, on the right half of this graph, this drop, this precipitous drop right here, is created from the financial crisis of 2008, in which we had a banking crisis. And basically we had massive unemployment. And we had to try to get ourselves out of that. And the Fed kept the funds rate and the borrowing rate to try to grow the economy at near zero for almost eight years. And then they started to raise that interest rate because it looked like we were into growth at the end of 2019, only to be dropping because of the COVID outbreak. So that's the Federal funds rate. And as you can see, this is our long-term interest rate. We're at, we're at historical lows in terms of government increasing interest rates. And we're going up again because of the inflation we've experienced. But part of the reason why we've experienced inflation is because of the recovery after COVID. As you can see here from this graph, and some of the events that have happened, wars and conflict and financial crises often have been followed by drops in interest rates and drops and long-term interest rates. Because the economy is not growing at a rate where it can sustain high interest rates. And then we have this peak in the late 1970s, early 1980s after the Vietnam war, with an oil crisis and a whole bunch of international things that happen that spiked the long-term interest rate. Over the course of the next 40 years, it dropped, it dropped to historically low levels, only seen really during the Great Depression. And right now we're back on the rise. We're moving up because inflation is created potentially also by good times. We wanted to look at today is often being an economic bad time. But the reality is that there are plenty of jobs, people are not unemployed. It's just that the income is not keeping up with the inflation rate. However, if you're retired, inflation is horrible because if you're living off savings that's in the bank, you're not going to necessarily be making any more money. So trying to make ends meet there. So the, the economy, they want to shoot for a 2% inflation rate every year. That's what the Fed tries to shoot for. 78, 9% is way off their target. And therefore we see them raising interest rates. Now that's only one tool they have at controlling economic inflation, instability and so forth. The other is through taxing and spending. So the government has the ability to tax and spend. And by spending more, they put more money out into the economy. So part of the argument of why we have high inflation has to also do with the plans that were passed in March of 2020, in December of 2020, and then March of 2021, in which trillions of dollars were pushed into the economy because we basically had to shut down the economic system because of COVID. And there's still a lot of money from that that's out there, which is making inflation fairly strong. Now, there is ways that government can actually try to reduce that through fiscal policy and that's never popular. The idea of taxing us, taxing citizens so that they either pay down the debt that the national government has incurred during the economic downturn or taxing just to basically have less money out there in the economic system. Now, fiscal policy is a little bit more challenging because then you have to get through the legislative branch and the executive branch and who you tax and at what rate and how you change those rates always includes winners and losers, at least it on the surface level. So if you are a millionaire and the President wants to increase your taxes by X percent, you're going to fight because that's your money. That is often what we hear in politics going on. But that may be that that tax increase could actually stabilize the overall economy in a longer run, it may not hurt you. It might help you, especially if government can get the economy back into a growth or a boom cycle in which if you're a businessperson and so forth, you can make more money even though you're being taxed at a little bit higher rate.

How that all plays out. There are a lot of economists and computer algorithms that are trying to advise policymakers on what the best approach is. But ultimately, taxes are still important also in terms of delivering services, in delivering things that citizens in a modern society feel that they need. Fiscal policies also important, not just during terms of maintaining the economy but growing the economy. So there are a lot of areas that government becomes involved with because if they didn't, no one would. And in particular, we look at things like the infrastructure, the roads, the bridges, and the transportation public transportation systems that bring workers from their homes to factories or to other workplaces. These items are very, very expensive to build. And the returns on their investment, or 50 or 100 years. And investments in such things require governments because individuals are not going to put their money away, or corporations are not going to put their money away for 50 or 100 years, hoping that the economy is going to reward them in 50 or 100 years. Whereas governments and that is the state and the people as a whole can do that. And that's part of that fiscal policy that we see that has evolved. Now.

We look at fiscal policy. The evolution was because of the Great Depression. There was always an idea that government needed a span. But during the Great Depression, because of severe economic downturns, this idea of bridging the gap for the individuals between the economic downturn in a growth period came through the idea of creating programs. Often programs that were either entitlement or means-tested programs that would allow people to survive. Not only survive, they would be spending, and by spending, that would be kind of a safety net for the economy if senior citizens are always getting a Social Security check, even though there's a severe economic downturn, there still be in being able to spend that money and that's able to generate growth in the economy. Liberals view was that whereas the conservative view was, the more that government gets involved, the less that the private sector can be involved. So on principle, there was that fear. Eventually through the 30s, 40s, 50s, and 60s, certain programs became not only standard for liberals, but also standard for conservatives. And often the arguments over entitlement programs today is not whether or not they should exist, but how efficient and effective could they be? In other words, for instance, if there's a cutting of benefits or changing of benefits. The, the argument Often on the liberal side that believes that government needs to be involved in the economy, is that any cuts is bad. And on the conservative and he cuts is good. Unfortunately, both of them don't have a monopoly on this. And quite oftentimes it comes down to the economics. What can we afford? Where can we take money from to afford certain things? And when decisions are being made to increase benefits or decreased benefits, there will be winners and losers. And oftentimes in politics, this brings out a lot of people don't touch my Social Security benefits. Senior citizens that are dependent on social security. If one party, the other claims that they're going to cut benefits, that is a recipe for political failure on that one party. So quite often like they did in the 1980s, the changes that are made are often not to the current people that are on social security. They would have to tell people and 15 years when you're eligible for Social Security, we're going to change your benefits. We're going to either increase the retirement age or do something else that we'll be able to address that issue. Quite often. Both political parties have been willing to give. Seniors who regularly vote, more benefits, whether that be George W Bush and a Medicare Part D for prescription drugs or President Barack Obama and the health of Portability and Accountability Act. These were expansion of benefits because they were big gaps. In these areas. In the United States, means tested programs usually go to individuals who have economic means or are not able to work. And these are not entitled, you don't pay into them. It comes from the general tax base as a way of having a modern society. There is a belief in that, and quite often, these are the areas where individuals have been targeted in these programs have been targeted for cuts historically. Because historically the people that are often on these programs are not as political as though seniors that have paid into Social Security and Medicare. The third area of economic policy that government is involved with is regulatory policies. And this really took off during the Great Depression. There were severe financial crises that were caused by banking and the stock market and the tingling of that. And very little regulation and nefarious nist led to the economic collapse. And therefore, what we saw evolve out of this was government creating a situation where they said, We don't want to let these banks and these investors basically rip off other people, then there's no trust in the system. So therefore, we're going to regulate it. We're going to monitor, we're going to audit it in such a way so that people feel comfortable investing, putting their money in the bank, making sure that they're not going to necessarily lose it all. Potentially investing in stocks and bonds and so forth. And that will help not only alleviate severe economic downturns, not eliminate but alleviate it. And at the same time inspire growth in the economy because taking excess that is created in our society and investing in it allows for growth. Now, this liberal versus conservative argument here has been that when government creates regulations, they're always bad. And the liberal argument is, regulation is good. And with that, what we do know is that there are some regulations that are bad. There's some that are good. A lot of that has to do with depending on where you're at. And sometimes regulations serve a purpose for a short period of time and very good job there. And then they might get in the way and they need to be looked at on a regular basis. Effective public policy would be looking at such regulations you're putting it in for one reason may be a really good reason. You're putting you in regulations, but it has unintended consequences. And those consequences could be worse than the IL that you're trying to prevent with the regulations. So looking at regulation in an open, effective way and seeing what's necessary is very important. It's also important to understand that we value safety and health.

And over the years, because of industrialization and cost-cutting by industry, government has stepped into those areas to regulate industry for worker safety rules and food safety and environmental rules because they have what we call externalities on the economy. Negative externalities are things that are unintended. Costs in production in the economy that are not borne by the, by the individuals that are doing this. So for instance, if a plant is, an industrial plant is polluting, there's a cost that necessarily that industrial plant would not be I'm paying for. It might be the people that are living downwind from that plant or down river from that, that plant that are getting the negative externalities. But that's a cost on society. So the idea of regulating these industries to reduce those impacts on the society as a whole is where regulatory polygon policy comes from. And what we saw at, during, for instance, in the 160s with the creation of the Clean Air Act, the Clean Water Act was that our watershed in our air was so polluted from the industrialization. Of our major urban cities that they were causing huge cancer rates, huge other lung and other elements for the population that was being born by the population. And the companies weren't necessarily paying for that. It got so bad in 1969 that the Cuyahoga River in Cleveland caught on fire and they couldn't put it out. It was so polluted with petrochemicals that were just being dumped in the river by industrial production. And today, we don't see that because what we do is require industrial plants to send their water to treatment so that it's treated before it ends up back in the watershed. And we have a number of different mechanisms for increasing environmental or reducing environmental pollution. They're not perfect. And that fight continues over balancing sort of the production of goods with the environment. But we've come a long way in 50 years. But sometimes we take steps back because of the politics, because there's money involved. Because industries, if they don't have to comply with certain regulations, they can produce things far cheaper. And this really is that a federal law because if it wasn't a federal level, companies would just pick up and go to another state. However, that often happened. And they didn't just go to another state, they went to another country. And by doing that, that impacts, for instance, workers and jobs. So it's that balancing act and regulatory policy can't just be even at a national level today, we got to start thinking of it globally. What are the implications on the global environment of pollution? Because greenhouse gases are not just impacting your country that's producing it's been, it's impacting the world. And with that, there will be costs that will be borne by people that are not necessarily directly getting the benefit, the economic benefit of, of the production that leads often to environmental degradation. So that's important to understand that COVID-19, in terms of the economy, the government had to respond massively, not just the United States government, but the global government. Part of that is often not thought about in terms of government's role in terms of addressing needs. It started off as a public health crisis. Our hospitals were filling up fast. We had to build temporary hospitals. People were dying, over 1 million people died. Thus far from this pandemic. And it led to severe illness. People are still suffering today. And government had to make decisions. They had to put regulations on what people could do or what they couldn't do if they hadn't done that. This is often the argument that's still going on politically. Oh, you went too far or you didn't go far enough. If they hadn't done the public health measures. We could have seen a total collapse of our health system. It's still very much injured from this public health crisis where we have burnt out doctors and nurses. We have huge costs. We have changes that are still going on. But it was also the fact that when we shut down the economy and in March of 2020, the economic health hurt. And the government had to pass a series of academic measures so that people still had money so they could buy things and so forth. Even though things were shut down. We didn't see this lead into a second Great Depression right away. Because people could still spend, if everything had been shut down and they didn't have money. Then coming out of the lock downs that we add experience would have been really, really difficult because production wouldn't have ramped up Because there would have been no demand for by people because they would have had no money. So we could have been in a long dark phase. Instead, what we did was we created inflation that we're trying to deal with. But it wasn't just the United States that did the shutdowns. China's still pretty much going through this COVID policy. Trying to shut things down permanently or temporarily to permanently tried to stop the virus, which is causing a global economic health issue because it's disrupting supply chains that we feel most directly right here in Detroit where we can't get chips for our cars. We've got, you know, you go to a dealership and you wanna get a car. It might take you six months. It's now because the car isn't there. It's because the chips that are needed to finish the final aspects of the vehicle production are not there, which impacts the global economic health. As an example. Remember, the role of government is the steward of public good. Public health is part of that. Life, liberty. Liberty and the pursuit of happiness. And government had to make some really, really big important decisions. When COVID hit. And if it didn't, probably many more people would have died. Economy would have suffered, even without the government, if the government took no action. And did they make always the right decision? No. Are they always going to make the right decision? Absolutely not. However, sometimes doing nothing is not necessarily the right decision. If they would've done nothing. If they wouldn't have shut us down, they would've said get ongoing, don't worry about this virus. Many, many more people would have contacted the virus, especially in that first six months. Many more would have died. But there would have been a fear of going out and doing things much more so and coming back. So people wouldn't have wanted to go to work at all. And ultimately the disruptions could have been much more massive. We saw in 2020, prices of food go way up. Not because of demand, but because the workers in many of these meat processing plants got sick, what would have happened if not just the, what we call the critical workers were out there working, but everybody was, what would that have meant for the global economy? Would we have actually had workers being able to produce food?

If we would've had more people dying and succumbing to COVID-19. So governments have to make really tough decisions sometimes that are not going to be popular no matter what. It may require government intervention at many levels. And it's not just a COVID-19 thing. There are things like making sure that products don't have things that are going to cause cancer in it. For approval of drugs that aren't gonna do more harm than good. And making sure our food that we eat is safe to eat. Those things we often take for granted. But if we didn't do that, change the whole nature of the public economy. If it was just buyer beware. What would that mean? How, how would we actually operate if an irregular basis? People were dying from the drugs that were, that they were taking, the food that they're eating. If they didn't have confidence in that, at a level high enough, the whole economy would shift to a more traditional economy that we might have seen 150 years ago. Where you're only taking in, in consuming the things you know, are good because you don't trust others. So what we saw with COVID was we saw a lot of different things happening. We saw emergency declarations on travel, stay home order, closing of schools, restaurants, gyms, et cetera. Hospitals regulating existing, creating new emergency hospitals, fracking the disease, and recommendations on behavior and a lot of that was shifting. Shifting because we were learning about this new virus and what it was doing. Today. We've got things like the vaccines and other therapeutics that have really quite reduce the severity unless you're in a high-risk population. And that has created a situation by which we're able to get our economy going again, for the most part normally. So we've seen in this last year a boom and that has led to the economic inflation. People want to get out. They want to do things.

They want, where they want to get things going. Now this wouldn't have been possible if government hadn't acted in the way it did. The creation of the Defense Production Act, which which basically increased the level of And, and quickness by which vaccines could be produced and distributed was extraordinary. People were often thinking 356 years. And what we saw was by the end of 2020, we have a virus that really hits big. In March of 2020. By the end of 2020 we've got some vaccines. And by March of 2021, we're getting everybody vaccinated, which allowed many more people to come back to normalcy. Very important to see how government can respond. We don't want to be Pollyanna-ish though. Sometimes these things are not perfect. There were things that were being done that are not perfect. However, the implications of what we saw on a global level because of this virus, what other countries were doing? Something had to be done. You can criticize, but criticizing for the purposes of learning and improving. And the next time you experience a similar situation, you can make a better decision is really important, not just criticizing for political purposes. Unfortunately, in our political environment. Whoever's in charge at the given time is gonna have to take pot shots either way. But they could also claim credit if they know how to explain this and what they're doing and why. So we saw emergency declarations at, at a national and global level. Basically the global, global economy shut down. And we saw our government involved in fiscal policy spending more trillions. Monetary policy, dropping that interest rate and regulatory policy, speeding up the FDA approval process to get those vaccines out. At.

At. An example of how government in, when needed, especially in extreme emergencies, can act very quickly. Are there consequences of all three? Yes, we see inflation. We see the fact that potentially if we would have had more time regulatory wise, some of the vaccines, including the Johnson and Johnson vaccine, might or might not have been released as soon and wouldn't have had his money negative impacts. But certainly we might look back upon this and say what f, But also what happens if we didn't do it quickly? What would have been, what would have been the consequences? So overall, government can address economic crises. Governments are intertwined within the economy. They're not even when you're in a capitalist state. It's not just something by which they are devoid of things. And government stability is directly related to economic factors. We've seen overthrow throat kings like Louis the 16th because of the economy. The French imperial order. We've seen that happen during the Great Depression, which led to World War II and has huge consequences on our global economy as well as our national economy. So I hope this lecture helped you understand the roles that government plays in the economy. And I haven't even touched upon a lot of the other details like education policy, where that is important because it sets an infrastructure, a human infrastructure for being able to produce and compete on a global level. And sometimes we don't often see these things as connected. But this is also enhancing our economy as a nation. Thank you, and I hope you have a great day.

plases answer the question based in the lecture no use other Al websites or google.lecture are all posted to help you answer the questions.

Questions:

1- write what did you learn from the lecture, what are four things that you have find interesting in

2- describe the public good, private good,and the sectors that you learned from this lecture.

3-was the lecture helpful to make you understand the domestic and economic policy.

4- Describe what point(s) in the lecture you need more detail or further clarification to better understand a concept or an idea presented in the lecture?

5- What question(s) has the lecture led you to ask? (Provide 1-3)