00:01
Question two.
00:03
Policyors who want the economy must decide how much to change the money supply, government spending, or taxes.
00:14
So why is it difficult for policymakers to choose the appropriate strength of their actions? so there are actually no standard answer to this question.
00:26
So here i just offer two possible explanation.
00:30
So first of all, the most basic one is that because macroeconomics is very, we vaguely know that there is a business cycle, but we do not know or it is very hard to predict that next moment or maybe next week or maybe next month, what will happen to the economy.
00:55
So the government, well, the policymakers, since it takes time to make a new law, if they decide to, say, suddenly expand government spending due to the current recession right now.
01:13
And then after the law is actually a maid and then execute it, maybe the soon as possible is, they to execute the law is like maybe a three, months later and then at that moment probably the economy is not in recession anymore is going up very well so this has the spending increase is going to be wasteful and and the second reason why it's difficult sometimes for policymakers to choose the appropriate appropriate strength of their action is because there are always lots of critics.
02:01
Say if they are going to raise the tax, raise the consumption tax to its people...