Okay, bismillahirrahmanirrahim. Assalamualaikum warahmatullahi wabarakatuh and a very good afternoon. InshaAllah today, you know, our plan is basically to start the lesson and we're going to start with unit number one and unit number one will cover two chapters from your text, chapter number one and also chapter number two.
And the basic idea of this particular chapter is just to give you a quick overview about... the subject matter itself you know what is economics um you know what are the important concepts that you know would be really matters later on when we want to venture and dive in further into macroeconomics so if i try to highlight some of the key objective of chapter one basically we try to understand you know the idea of the economics my approach Normally, it would be to give you some basic understanding in terms of the philosophy behind the field of economics, why it emerged in the first place, for instance. And then we also try to describe a little bit in terms of the difference in the sub-team of economics, the discussion on microeconomics and also macroeconomics.
But of course, for this course, because we are focusing on macroeconomics, you know that will then set a foundation in order for you to understand further you know how different between micro and also macro and then at the latter part of our discussion uh probably you know in the next class we're also going to talk about one important economic model to start with so the idea is basically to give you a good understanding what is the main purpose of an economic model or economic theory and how we can represent this economic model in the forms of illustrations using diagrams and so on. And that particular model that has been introduced to you in the chapter is what we call as production possibilities model. So that is basically a quick overview of chapter one, what you can expect and what you have to really understand.
when we discuss about this particular chapter. So when we talk about economics, sometimes I ask my kids, because they know that I'm teaching economics, they can see a lot of books about economics. So I just ask them what really they know about economics, just to test whether they are aware. what they're that's teaching and so on so you know a quick answer for my kids you know they would say money for instance and if i ask some of other students who doesn't have any background in economics you know some of them would say you know probably demand and supply you know equilibrium and then if i ask students who had learned about economics before of course they would be able to explain to me a little bit more specific in terms of scarcity, opportunity cost and so on.
But I think what is important when we want to describe about economics, the basic idea is about how we deal with our daily decision making. That's the key word actually. When we talk about economics, it's about how we can make good decisions.
And I'll give you one example. When you join the university, for instance, in the first semester, prior to joining the university, you have to make decisions. Which university you have to choose, for instance, or which course you want to join, which program you want to join. And in order for you to come up with the best optimal decision, you will start thinking in terms of the pros and cons.
What is the good thing about this particular university? How different is it going to be with other institutions and so on? So that process basically is also part of economics.
In fact, if we want to go to certain destination, you know you have to really think about which would be the best route for you to take. If I'm traveling from Subang Jaya to Gombak, you know, to the main campus, I have to really set my mind, you know, whether I want to take federal highway or I want to take, you know, another highways, for instance. And to consider all those, it would take into account in terms of the time, for instance, what would be the cost. incurred to me in terms of the distance, in terms of the fuel cost.
So what I'm trying to say here is when we talk about economics, it's not just about demand and supply. You have to see it in much bigger perspective. Firms, for instance, when they want to release their products, if you are talking about Samsung and Apple, for instance, when would be the best time for them to release their product?
Whether they want to wait for Samsung to release their new product first, or Apple want to go first, that also involves some decision making, because eventually that will affect in terms of their promotion and so on. So you have to see economics in a much bigger perspective. That is basically what I'm trying to say here. And looking at the way how we define economics, it is very important for us to understand the philosophical dimension, meaning that the reasons behind the existence, you know, why we have to make good decisions, you know, why we have to come up with optimal decision making. The core concepts that basically leads to the emergence of these economic studies is basically what we call as the concept of scarcity.
And scarcity is basically, it refers to the fact that resources are limited. When I give you the example earlier, when I want to... travel from usj to gomba you know the reason being why i have to choose the best route because it involves resources on my part it will incur my time you know it will also incur you know my the course you know my energy so all those basically you know gonna affect in terms of you know the resources that i'm gonna utilize for the purpose of achieving you know my goals to reach you know gombak campus for instance and in the court and in the context of economics when we talk about scarcity here we are referring to limited resources and the resources basically covers all dimension of course in your textbook if you refer to Chapter 1, they try to classify into four important categories.
You know, land, capital, labor, and entrepreneurship ability. But, you know, in our context as human beings, when we talk about resources, we are not only talking about tangible items. You know, time is also one of the important resources.
Energy is also one of the important resources. So, the fact that, you know, we see things. that resources are limited in that particular sense.
That basically leads to the need for us to really think of the best way in order for us to make decisions. Because with the limited amount of resources that we have, the idea at the end of the day is we want to make sure that we achieve our goal and also we could achieve the maximum satisfaction. So that is basically the concept of scarcity, meaning that if we do not consider the scarcity concept in the first place, we don't have really to bother much in terms of making good decisions.
If there is no limit to the energy that you have, to the time that you have, to the money that you have, you don't bother much in terms of making good decisions because those resources will keep flowing. And the reason being why you have to really prioritize and make good choices or good decisions is because you know that in some way... you have constraints in terms of resources that you own.
The money that you have is very limited. If, let's say, you have RM100 with you and you want to spend that RM100, you may not be able to purchase everything that you want. And having that constraints will require you to come up with good decisions.
Now, apart from the scarcity concepts, There is also another important dimension in which would also bring us more to the fact that we have to come up with better decision making and also choices. And this is basically part and parcel of the characteristics of human being. Because why?
For human being, we have unlimited ones. So what does it mean? If I ask you to list down what you want, the list is going to be endless. As human beings, we always want something more and more and more. And the problem here is that these unlimited ones and the resources that we have is not matching.
Because the resources that we have are limited, the scarcity concept. the ones that we have are unlimited. So, it doesn't match up really in terms of between these two things.
That really explains again why we really have to think and come out with better decisions. To explain a little bit further in terms of these unlimited ones, we can just think of you know storage if you have a thumb drive for instance probably you start with two years ago eight gig of time drive you know after a few months you notice that you know that eight gigs of time drive just doesn't fit you know all the data that you want to stop okay so what's going to happen you're going to upgrade it to 18 gig or 32 gig okay and then this still won't be enough when you reach certain stage you would realize that it's just not gonna enough so you know you keep wanting more and more and more why because in the context of human beings you know ones are unlimited same goes you know to what i have you know at my house the fridge for instance you know when we first got married you know we purchased a small fridge you know just to cater two of us And then of course, when you have more kids, you know, you need more stuff to put in into the fridge. And then my wife started asking me, you know, to buy a bigger fridge, you know.
And then this thing continues after five years. And then you want to have a much bigger, you know, size of fridge and so on and so forth. So that is basically the nature of human beings. But the important thing is, you know, if there is no scarcity problems, you know, you don't have to. to worry much because you know that you can fulfill all your wants.
But the issue is we always have constraints in terms of resources that we have. Even if we are talking from the government perspective, for instance, because when we talk about macroeconomics, we will be dealing a lot from the perspective of policymaker and also government. People are asking, you know, a lot of things from the government. The government would have to basically provide infrastructure, building schools, airports, hospitals, and so on.
But again, the government themselves, they also have limited funding. The fund that they receive is basically the one that they collected through Texas. But that itself has a certain limit, meaning that you know they will have to really decide what need to be prioritized whether they want to build new international airport now or whether they want to build more new hospitals for instance all those basically you know will have to be balanced you know to ensure that whatever that you own you know whatever resources that you have would be able to give you the maximum satisfaction on the part of individuals, on the part of the government, or even on the part of the companies. If we are talking about the companies, companies also have limited funds based on the resources, the profit that they gather. They have to really consider how many labor that they would like to employ, for instance.
They can't employ 100. units of labor having that they have limited amount of cash flow for instance. So all those decisions will have to be made and that basically brings us to the key thing. Having these two concepts which are contradicting with one another that basically leads us to come up with choices. So economics is about making decisions or in other words it's about making good choices.
So let me just put it down here. You know, the idea is basically making good choices. For what purpose? The idea is again in order for us to maximize satisfaction. If you are looking from an individual perspective, you know, when we want to decide which good to purchase between good A or good B, for instance.
The decisions whether you're going to purchase good B instead of good A would have to be based on the fact that you want to maximize your satisfaction. In economic terms, the word satisfaction normally will be translated into utility. There is a specific term that we use in economics to describe satisfaction level, and it is what we call as utility. So that is why I put there, the main idea is basically to maximize utility.
And of course, this utility satisfaction covers different dimensions. If we are talking from the perspective of policymakers, government, what they want to ensure would be it can maximize the welfare of the people. If you are talking about companies'dimension, their main goal would be to maximize the profit, for instance.
But in general sense, the reason being why we want to come up with good choices, good decision making is to ensure that we can maximize our utility, profit or welfare of the people. And in achieving this or in making this process happen, we will have to deal with another important concept. what we call as opportunity costs. Okay.
Opportunity costs. So what it means is that given that you have to make choices, there will be things that you have to forego. Okay. At this particular stage, given the fact that you have limited amount of resources now. you know you will not be able to fulfill everything that you want so there are things that you have to forego there are things that you have to sacrifice so the concept of opportunity cost in economics is also very important which try to explain that you know in whatever you do you know there will always be cause involved so i give you one example when i talk earlier about the government, whether they have to choose between building schools or hospitals.
When they decide to go for building new hospitals with the amount of funding that they have currently, that means they will not be able to make use of the same money that they have. for the purpose of building schools because once you decide to take up and make use of certain amount of money or resources that you have for that particular purpose it means you just not gonna be able to make use of the same amount of money for other purposes so similarly you know for us when we decide you know to join live sessions today feeling that there will also be an opportunity to cause what would be the opportunity cost? The opportunity cost would be the things that we can do at this particular moment.
Meaning that, you know, watching movies or spending time with friends. Why? Because we have made the decisions that we want to join in the live sessions, you know, and that is basically, you know, the priority, you know, in terms of how we're going to make use of the resources that we have today, for instance. So in economics, there is also this very important phrase to describe about the opportunity cost. In your textbook, there is this phrase, there is no free lunch.
There is no free lunch. Meaning that what they try to explain is the fact that although someone would like to treat you for lunch, they will blunder you. Still, you have to bear certain costs on your part as well.
Nothing is free. because you still need to consume your time, you still need to consume your energy, you know, and those would be part of your resources as well. So at the end of the day, there will be things that you have to sacrifice and those sacrifices is basically what we call as an opportunity cost. And this concept of opportunity cost is not only mainly in the form of monetary forms.
When we talk about monetary forms, meaning that when... Because remember, when we talk about resources, it may also include the time, it may also include the energy. It would be difficult for you to really quantify in terms of how valuable is the time, in terms of monetary terms.
So it's not really about just in the context of monetary value. The opportunity cost covers, you know, broader dimension, meaning that whatever that you have to sacrifice because of the fact that you have made the decisions earlier, you know, that are basically considered to be things that we have to forego or the opportunity costs. So if you look, you know, what you have in the slides. This is basically, I think, what you have in your version of slides.
I've been talking this much earlier. You know, when we talk about economics, we are basically talking about, you know, how we manage our resources in order for us to achieve, you know, optimal decision making for the purpose of maximizing our utility. And the reason being why we have to make good choices here is because, you know, our wants are unlimited and it is inconsistent, you know, with the amount of resources that we have.
So technically, you know, in your textbook, you know, some people, they prefer to memorize what it means by economics. But I think what is important is how you should be able to express it, you know, in your own words. So economics is just about, you know, how you.
come up with good decisions. In other words, how you manage your limited resources so that you can come up with better decision making in order for you to achieve maximum satisfaction. From another angle, when we talk about economics, it's about how you manage your resources efficiently.
The efficiency concept is very important in economics. because the idea is we want to make sure that we can translate the limited resources that we have in a way that it can benefit us the most, maximum satisfaction. So again, in the next slide, it describes about resources are scarce, choices must be made. And I also explained to you that the phrase, there is no free lunch. which basically try to relate with the concept of opportunity costs.
So again, opportunity costs here, you know, wouldn't exist in the first place if there is no concept of scarcity. So that is why when you discuss about economics, the scarcity concept will come first. Without having that concept emerge, you know, in the first place, there is no issue, you know, for you to...
really bother about making good decisions. In other words, there will also be no issue of opportunity cost because if your resources are unlimited, you know you can fulfill everything you know there will be no opportunity cost you know meaning that we are talking about time is unlimited you know infinity your energy is infinite and so on definitely you know you don't have to worry much in terms of giving priority what need to be done first you know in order for you to come up with good decisions so in any textbook when they try to explain about economics you know Those are the important concepts that you will come across. And then the text starts to then explain a little bit more in terms of the dimension or the sub-team discussed under the field of economics.
So in broad sense, we have two different types, what we call as macroeconomics and also the other one is microeconomics. When we talk about microeconomics, let me just go to the second one here. When we talk about microeconomics, the focus would be more on discussing or understanding the behaviour of individual economic agents. And when I talk about individual economic agents, we are referring to consumers, for instance, because they have to make choices. We are also referring to firms, because firms also will have to make decisions in terms of how much labor they need to employ, how many outputs they need to produce.
That is also another economic agent that we have in the economy. And thirdly, we can also consider the government. as another economic agent because the government will also have to make decisions, you know, considering the resources, limited resources that they have, they have to come up with the best solutions, you know, to offer to the people, for instance. So when you try to study the behavior of each individual economic agents, you know, why consumers prefer to purchase more of good A instead of good B, for instance. you try to understand you know the reaction of consumers when it comes to their decision making that is basically microeconomics okay mi similarly when you try to study the behavior of the firms how the firms can maximize their profit how can they minimize their costs what would be the best approach in order for them to produce goods okay all those are basically you know relates to microeconomics why because specifically you are trying to understand the behavior of the firms and similarly when you are trying to look in terms of the decision making of the government you know from that angle itself that is also microeconomics in other words you are not bringing in the connectivity between these economic agents you're just going to look you know one economic agents how they deal with their respective decision making.
So one good example, these are a few articles from the news that I pick up just to highlight and share with you the issue related to microeconomics, MI. For instance, the discussion about Asia. to shut down their operations in Japan. This basically involves decision making on the part of the firm or the company.
So if you try to study in terms of what's best for the firm in order for them to make sure that they have continuous cash flow during this moment, pandemic and so on, process decision making is basically a study of microeconomics okay because you are looking at that individual economic agent which is the film and then the issue of demand and supply in the market you know how much is the price of beef or mass in the market you know that depends a lot in terms of the producers side you know how much they produce how much they allocate the resources to produce the goods. Again, this is an issue of what we call as microeconomics, because we are really looking in terms of specific decision making on the part of the company. If we try to compare it with macroeconomics, macroeconomics try to look from the bigger much perspective. And that is why we use the term here aggregate.
When we say aggregate, we are not only concerned about individual economic agents alone. We are also interested to see in terms of how this... individual economic agents interact with one another. When we talk about macroeconomics, it normally involves a much bigger level, for instance, national level. When we talk about Malaysian economy as a whole, which involves different parties in the economy, the consumers, the producers, the government all together, when they come up with the decisions, it affects one another.
That is basically macroeconomics. So macroeconomics, we are looking more of the entire ecosystem, not just looking at one particular economic agents, but we also interested to study the interactions, meaning that how the decision made by consumer or by the producer would affect the consumer or how the decisions made by the government, for instance, when the government would like to. um retract subsidies for instance you know or when the government would like to impose new minimum wage that definitely also gonna affect the producers the firms and also you know the consumers because the consumers are basically the one who're gonna get paid at the end of the day right so it's gonna cover much bigger aspect and this is basically what we call as macroeconomics so Few examples that I have here to basically relate with the issues and also discussions of macroeconomics. Number one, on the left side, it talks a little bit more about income distribution. Because income distribution here is not just a matter of concern by the consumers.
The government will basically have to play a role to make sure that income is evenly distributed. or equitably distributed among the people. And that is also where the firms will also have to pay the role, giving employment opportunities, making sure that the salary would be sufficient enough to cover the expenses of the people and so on. So it covers much broader aspect.
Rather than just talking about consumer alone, it basically affects the entire economy and the entire ecosystem, which covers different economic agents. The issue of how the government deals with the pandemic, that is also another macroeconomic issue. The assistance on the part of the government to small and medium industries, for instance. Payment made to B40s or whatever initiatives on the part of the government to promote economic growth, to make sure that the economy will recover. from recession, all those not only gonna evolve one particular economic agent, but it involve other economic agents as well.
When we talk about recession, for instance, of course, you know, people are losing job, companies are making losses, you know, so there is no such thing that we are looking only from one angle, because macroeconomics, it covers the entire ecosystem. So the issue of inflation, for instance, that is also another important thing that we're going to discuss under the context of macroeconomics, because inflation is going to affect consumers, how much they're going to pay in terms of prices, the cost of living, those are being translated to the consumers. But of course, the producers might also feel the pain, because if prices increase, costs are also going to increase on their part.
and then people might not be able to purchase their products. A good analogy to differentiate between these two subfields of economics, in your textbook they give this interesting analogy. If you study microeconomics, it is as if you study each tree in the forest. So you try...
you go into the forest, you try to pick up one particular tree, and then you study how that tree grow, for instance. You know, what are the... things required for the tree to grow and so on and so forth. So basically you are looking specifically on that one particular tree. Macroeconomics on the other hand, MA, you are basically looking not only at that particular tree, but instead you are looking at the entire ecosystem of the forest.
You want to see how one particular tree interacts in the entire ecosystem. so you also have the insects you also have you know other forms of um you know creature you know within that forest ecosystem that would affect one another so that is why you know when we talk about macroeconomics we are considering a much larger scale a much larger impact you know rather than microeconomics and of course these two categorizations are just brought categorizations of economics. If you go deeper into the studies of economics, there are plenty of very specific areas.
For instance, health economics, transportation economics, energy economics, you name it. My supervisor, when I did my master degree, the professor who supervised me, He studied in US and he did his research on Hollywood economics. He tried to study in terms of the timing of the release of box office movies. Because that also involves economics.
As I told you earlier, timing is very important in order for you to make sure that you can maximize your profit. You are movie producers, for instance. You want to make sure whether you want to release your movie before other movies or you want to release your movies probably sometime later.
Especially for the case of Lord of the Rings and Harry Potter. Because these two movies, basically, they are very close in terms of the timing of the release. So there is a strategy, economic strategy, in describing...
whether it would be best for you to move first or you're just going to wait for a lot of the rings to release their movie first. And then after that, you're going to release your movie. So all those things are basically part and parcel involve economics as well. So I'm moving to the next part here.
We're also going to talk a little bit about the role of economic theory or economic modeling. Because at the latter part of... chapter one i will introduce to you one simple but very important model in economics what we call as the production possibilities model so prior to introducing to you this economic model i would have to explain little bit in terms of you know the basis of having economic theory what is the purpose what is the setup and also you know how you basically progress or how the theory evolve over time.
So when we talk about an economic theory or economic model, the main purpose would basically to simplify how to make it easier for people to understand a relationship between certain things. The key word here is to simplify things. So the purpose of a theory is basically to make it easier for people to understand the cost and effect, for instance, or what is the relationship between X and Y. And in order for the economists to come up with this relationship in explaining the connection between two things, this is where they might come up with diagrams. to assist people to make it easier for them to understand.
Or in a bit advance, sometimes they also try to prove that using mathematical modeling. So economics, especially at a more advanced level, especially once you go into master degree, PhD, everything will be mathematical. It's more of proving the theory mathematically. rather than just describing using the simple diagrams and so on.
So why do you want to come up with this simplification? The idea is basically so that you could understand the connection so that you can come up with a good prediction. When you could understand one particular theory, that theory basically tries to describe certain relationships, which makes it possible for us to come up with predictions for the purpose of us coming up with good decision making.
okay so it's a kind of um giving you some guidance you know what you can expect to happen if this thing happened for instance and how should you behave or how should you react you know when you see you know that this thing happened so i give you one example okay one simple um theory Among the earlier theories discussed in economics, especially if you look at chapter 3, for instance, or when you study principles of micro, I'm going to describe in terms of micro perspective first, and then after that, I will give you some idea in terms of macro perspective. There is this law, what we call as law of demand. The law of demand. So law of demand try to basically describe. the relationship between price of a good okay and also the demand for a good the demand for a good so what is the theory what does the theory says the theory says when the price of a particular good increases the demand will basically faults okay when the price becomes higher you know people tend to purchase less of those goods and when they come up with this law of demand Specifically, they are just looking in terms of the connection between price of that particular good and how it affects the demand.
In other words, in setting up this particular model or this particular theory, they come up with certain assumptions. When you talk about theory or model, because the purpose is for you to simplify things for people to understand, you cannot bring in all the real factors all together. you know in the real world setting there are plenty of different factors that may affect why people demand for a product okay but to make it easier for you to understand at least you are trying to study really in terms of the connection between how price would affect demand and in doing that in setting up your model that is where you know in economics we will deal with a lot of assumptions okay so the purpose of assumptions here is basically to make things simpler for us to understand especially when we just try to concentrate on these two particular variables we want to understand how prices may affect demand okay so in other words we try to ignore you know other variables we are not talking about other variables. We just want to understand how really the reactions of the people whenever prices increase.
So when they study, they found that in general, when prices tend to increase, that is where people will purchase less of that particular good. And when price goes down, people tend to demand more, for instance. So that particular theory has certain limitations.
What is the limitation? Because it doesn't take into account other variables because they just try to look specifically on the connection between price and demand. So meaning that every theory will have assumptions. And the most important assumptions that you will come across a lot in economics is the concept of seterus paribus.
This is a Latin word which basically tries to describe you assume other factors. factors constantly. What it means when you want to study the law of demand, looking at the connection between price and also demand, you are basically ignoring all other factors and you just look in terms of the connection between price and demand.
What are other factors that may also really matter you know in the real setting for instance when we talk about demand? Income is one of the important variables. But in our context here, when we want to explain law of demand, we just ignore that for the time being.
Income, you know... we try to put it aside or in other words we try to highlight the fact that you know all other factors remain constant. So the word satiris paribus is basically describing about all factors remain constant or in other words we are trying to ignore you know all other factors for the time being for the purpose of simplifying you know the theory and also the model to make it easier for us to predict.
really in terms of what is the connection between price and demand okay so let me just put it here ceteris paribus means you consider all other factors constant so the word constant here mean you know you are basically considering that you know other factors doesn't really play a role in affecting demand the focus is just only on price variable and therefore you assume that other factors are not relevant in this context. So what are the problems here? So normally when you come up with an economic theory and you have these assumptions in place, that will basically limit in terms of the practicability of the theory. Because when you start... having these assumptions, the more assumptions that you have, the more unrealistic it would be.
Because in the real world context, of course, all these factors are going to play a role as well. But for the purpose of simplicity, we just ignore it in the first place. But the way how we improve the model is basically by relaxing the assumption.
So when I put down here. relaxing the assumption meaning that slowly you would see that although we start with the law of demand only looking on the price and also how it affects demand but slowly you know economists will try to include and make things much more realistic they start to consider you know changes in income they also start to changes this also start to consider you know changes in other factors which are more realistic So that is basically how the model evolves through time, meaning that they will try to limit the assumption bit by bit. They will try to relax the assumption bit by bit to make it more realistic. And when your model becomes more realistic, that is where your model will be able to come up with better prediction, much better accuracy in terms of prediction.
But please also take note that when we talk about theory, you know nothing is 100 realistic because whenever there is a theory there will always still be assumptions you will not be able to make sure that you consider every single factors that you have in the real world setting in order for you to explain you know the connection so in other words prediction you know can come close to 100 but it definitely will not be able to ensure that you will always have 100% accuracy in prediction. Take the case of stock market. There have been a lot of theories about stock market's movement, how the market is going to perform, what you need to purchase in terms of among all the stocks. There are plenty of economics and finance theories to explain that.
But at the end of the day, you might... not be able to ensure 100% that even though you follow those theories, it will give you 100% as what you expected. Because the thing is, in the real world setting, there might be some other factors eventually will come in. Different scenarios might change at the end, which have not been captured by the theory and so on. So again, you have to be clear.
When we describe about a theory, it is actually to make it easier for us to understand things. So therefore, it has certain assumptions in place. And when you have these assumptions, you know, that basically brings some limitations in terms of the theory in making predictions. But this thing can be improved as you try to improve your model by...
relaxing the assumptions bit by bit. okay when i say relaxing the assumption meaning that you try to remove the assumption bit by bit and i think it will be much clearer later when we talk about the production possibilities model i will try to explain in terms of the process you know what it means by relaxing the assumptions how we can basically improve the model so that it can become more realistic in some way in the context of macro because earlier i described to you law of demand that is micro perspective In the context of macro perspective, one of the theories that we're going to learn later is what we call as fiscal injections. Fiscal injections mean the government provided stimulus packages into the economy, inject stimulus packages into the economy as a way how to recover from...
recession for instance okay so the theory says the government will have to play a role to ensure that you know they can solve problems of recession the government will have to increase the spending so this spending means the government will have to come up with new projects because new projects basically gonna create new employment opportunities people will get new jobs and that is where the economy will start to revive again okay so the theory says there is a need for the government to play a role especially to revive back the economy from recession but that theory is basically very general in the sense that you know in the real world setting the government may pump in money coming out with all these new development projects mega projects building hospital highways and so on just to create employment to make sure that people can get new jobs and then they can start spending in the economy and the industry would also you know continue to produce goods to support government projects but in reality you know this might not happen why because in the real world setting you know you might have correction corruption you know here and there although you come up with new projects you know government is basically pumping money That at the end might not reach its target because in the real world setting, there might be some hiccups here and there. There might be some leakages here and there. So at the end of the day, what I'm trying to say, although you have a theory, that theory basically tries to explain what you can predict.
And that prediction is basically based on simple simplifications of... the real world setting just to give some idea in terms of what can be done. But it might not achieve the expected outcome because it is subject to other real factors that are taking place in the economy, different scenarios, sudden change in the environment and so on.