2.3 UNEMPLOYEMENT (SOLUTION - SUPPLY SIDE POLICY) Flashcards
1
Q
what is supply side policy
A
refers to economic strategies aimed at increasing the productive capacity of an economy by improving the supply of goods and services
2
Q
advantages of supply side policy
A
- By enhancing productivity, supply-side policies can lead to higher economic growth rates
- can stimulate investment and lead to job creation
- increased supply can help keep prices stable, reducing inflationary pressures
- can improve a country’s competitiveness in global markets
- Supply-side policies often focus on structural changes, leading to sustainable long-term economic improvements
3
Q
disadvantages of supply side policy
A
- The effects may take time to materialise, delaying their impact on the economy
- Some supply-side measures may disproportionately benefit higher-income individuals or businesses, widening income inequality
- excessive government intervention in markets can lead to inefficiencies and distortions
- Initial implementation costs may be high
- Focusing too much on supply-side measures may neglect demand-side factors that also drive economic growth
