Hi guys, welcome back. Again, let's remember what we have discussed so far. GDP, it's my income, gross domestic product. I know you might be tired of listening to what I'm saying, but this is important. My GDP is my income, and what are my components that makes part of my GDP? One, household consumption. Household consumption depends on disposable income. Remember, disposable income, it's my income minus tax, and then we just said about gross capital formation. I will not invest in gross capital formation that yields, let say, or I would offer get a return of five percent if a government bond offers me 10 percent, I'd rather stay at home by government bond. Gross capital formation depends on negatively correlated interest rate and something else. Now I would like to move to government because the government also has a very important part of my GDP, that's what we call government spending. It makes sense because let think, if the government decides to invest in infrastructure, highways, roadways, whatever it is, GDP tends to increase, but let's make a brief disclosure here. Again, we will see that economics at the end is a lot of good sense. What I mean by that? Let's take, for example, can a government invest in Infrastructure or all the projects if the government does not have enough money from taxes? Well, it depends. I will see later. But now we just want to say that if the government spends more than he get from taxes, he will post a budget deficit. What I mean by that, where T minus G, T stands for taxes or revenue, government revenues minus G, government expenditure is going to be lower than zero end up with a budget deficit all the way around. If the government has enough cash revenue from taxes that cover up it's expenditure. The government is experience a budget surplus. What I mean by a budget surplus? Government revenues minus government expenditure is higher than zero. You have excess of cash, that's what we have, but just for the sake of understanding, if the government, for example, let's move a little bit deeper, if a government wishes to pursue an expansionary fiscal policy, figure out that I'm trying to include some new names that you need to understand, expansionary fiscal policy. He can do any of the following: expansionary fiscal policy, the government could either increase government expenditure and, or decrease taxes. That's what we call expansionary because you want to increase or to boost my GDP using fiscal policy. Fiscal policy is stands for government, monitory policy, we'll see later on. All the way around, if the government wants to pursue a contractionary fiscal policy, he can do any of the following: contractionary fiscal policy, he could decrease government expenditure and or increase taxes. Why contractionary fiscal policy? We will see sometimes the economy is too overheated. The government decide to decrease government expenditure or increase taxes. That's something we will like to stop here and move later on to another macroeconomic variable.