Let's go ahead and finish up chapter 12 with World War II. Relatively short chapter. I want to talk about investment. And then I'm gonna lump some labor stuff in here, the key with investment, and I'll write investment again, y equals c plus i plus g plus x minus m. Real GDP equals consumption plus investment plus government spending plus exports minus imports. We saw from last lecture that consumption fell by about 30%. So I'll just write the negative 30% right there. Investment fell by about 74%. And you might ask the question, why is investment falling when firms are producing more tanks and more bombers and all sorts of jazz like that. Those tanks and those bombers that are produced fall under g, government expenditure. They don't fall under i, what falls under i is expenditures by firms on essentially capital like tools and machinery. So that, that's why, that's part of the reason why investment's falling, because it doesn't include that the government produced goods and services. Then you get these government expenditures. But here's some other reasons why it's falling too. So recall that when it comes to investment falling, there can be two reasons for that in the financial system. From appendix nine, we have saving supply and investment demand. We've looked at this model plenty, real interest rate and then the dollars of loanable funds, I'd say quantity of loans for sure. There's two things here for saving and investment that can cause investment to fall. And one thing that's partially contributing to falling in investment is crowding out that's going on from deficit spending. So the budget deficits from issuing the war bonds caused saving supply to fall, which ultimately cause, is gonna cause investment to fall here. We've done that before. Now that's being mitigated though by the Federal Reserve. Because the Federal Reserve is conducting expansionary monetary policy. So there's gotta be something else that's causing this huge 74% decrease in investment relative to all production in the United States. And the key is that investment demand, this entire curve here is decreasing. And there's a few reasons that are, that are causing it to decrease. In other words, there's some, there's some new shifters to know here. The corporate tax rates, so corporate tax rates work similarly to income tax rates. The progressive and structure, firms pay higher corporate tax rates on higher marginal profit. And corporate tax rates over World War two are significantly increasing. So that's gonna reduce the profitability from this production. That is going to reduce the willingness to pay money to borrow money because that's what that investment demand curve is, it's primarily the firms, it's the, it's the borrowers. Something else that's going on as well is price ceilings are lowering the profitability. So from the whole, the line order with the price ceilings, that's certainly gonna limit the ability to increase price and that's gonna harm profitability as well. There's, what sort of goes with that too, is there's shortages, of course, of inputs for producing consumer goods. The last thing is this pretty straightforward. During a period of war, the, there's uncertainty if you own a firm on, whether you're gonna keep that firm. In other words, are you gonna win the war or lose the war. War is not conducive of business owners saying let's go ahead and open up a new ice cream shop. So basically uncertainty of the future right there. So these things all else the same are of course going to cause investment demand to fall. And if you graph that out, you should be able to do it by now, you'll see that causes investment to fall. That also causes interest rates to fall. While this here, the budget deficits cause investment to fall too. But because they're a saving supply shifter, they cause the real interest rate and all interest rates to rise. So the only conflicting thing is on the real interest rate, hence all interest rates in the economy. But overall, there's a lot of factors here that are causing investment to fall in the United States. And that's why you get that huge 74% decrease. Lets go ahead and take a look at labor. I'm gonna go ahead and talk about women in the labor force since there's a little bit of confusion there. Most of the rest of the chapter is very straightforward though. So go ahead and read the rest of the chapter. The Selective Service Act, how that removed most of the unemployed. Labor unions with the Smith- Connally War Labor Disputes Act, the executive orders. And I'll talk about Rosie the Riveter, so. Women in the labor force. A lot of people know that the labor force participation rate for women increased during World War II. Because since so many men left the United States geographically and of course fought overseas, women came in and showed that they could do the jobs that men could do just as well. What a lot of people don't know is that during World War Two, the unemployment rate for women increased too. And that's not a common thing that you see from an economic perspective. Because usually what happens in an economy, if an economy slows down, it lays off workers and unemployment rises. Or if an economy speeds up, employment rises, hence unemployment falls. This is usually what happens. So with World War Two and women, what's so interesting is more women went to work. So the employment of women increased. And there were women who wanted to get jobs but, and were available and looking for work, but couldn't find work because they wanted to make a difference and contribute to helping win the war. So being available for seeking work, the unemployment of women increased over World War Two. Highly uncommon. You just really don't see stuff like this in history. But then again, during a war, you do see some pretty interesting things. Now the other thing that I want to mention is this. The labor force is equal to the number of individuals who are employed, but it also includes the number of individuals who are unemployed. Lot of people think it's just like everybody working, no it's also everybody who would like to work and is actively seeking work. So, and available for it of course. So the labor force for women over World War Two significantly increases because more women like Rosie the Riveter are working. But now there's women who are also looking for work but can't find it. So that causes a relatively much larger increase here, of course, in the labor force than one would originally anticipate. So it's good to not forget this labor force formula. It can certainly be useful later in life. And of course it is in this course, especially for this section. But, thank you for listening.