The immediate focus of governments during the COVID-19 crisis thus far has appropriately been to address the health emergency and provide lifelines for vulnerable households and businesses. Governments now also need to prepare economies for safe and successful reopening, foster recovery in employment and economic activity, and facilitate transformation to a post-pandemic economy that, with the right policies, can be more resilient, more inclusive, and greener.

Thus, the quality and content of fiscal policy packagesand within them, public investment choiceswill be key to supporting the economy and creating jobs in the near term but will also determine socioeconomic outcomes for decades. The stakes are high: although todays large fiscal packages are necessary, they will have long-lasting implicationsdirectly, through choices made about expenditures and investments, and indirectly, by calling for lower levels of discretionary spending or higher levels of taxation if borrowing costs rise significantly in the years ahead.

In response to the COVID-19 crisis, governments around the world are taking extraordinary measures to save lives and limit the sharpest and deepest global economic collapse in contemporary history. Public investment is urgently needed in sectors critical to controlling the pandemicin particular, health care, schools, digital infrastructure, safe buildings, and safe transportation. In addition, public investment should play an important role in fiscal packages allocated for the recovery, to promote job creation and private investment in the near term and to increase productivity, make progress toward the Sustainable Development Goals (SDGs), and strengthen resilience to crises in the longer term.In view of the above text, students are requested to answer the following questions. You may use your own ideas to explain the challenges as well as opportunities that governments need to act in -order- to balance between public expenditures and revenues.

answer the following:

In general, taxes impose an excess burden on people, i.e. a cost beyond the tax revenue collected by the government. Explain the impact of imposing an excess of tax burden on people and show how labor supply is affected by the burden of an income tax?

Even when public provisions of a good is selected, a choice between public and private production must be made. A key factor in determining whether public or private production will be a more efficient is the market environment. Can you explain how the demand for public goods differ from that of private goods? If you take the concept of efficiency into consideration, what are the conditions under which the production of public goods becomes efficient? Do you think that markets have failed to achieve efficiency under COVID? Explain