3.5 - supply side policies Flashcards

1
Q

Supply side policies

A

Aims to influence LRAS
Aims to improve econ growth, employment, inflation, CCAC

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2
Q

Types of SSPs

A

Interventionalist (Keynesian)
Free Market (classical)

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3
Q

Interventionalist SSP

A

Training + education
Improve infrastructure

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4
Q

Free market SSP

A

Improving efficiency + competitiveness by freeing up market forces

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5
Q

Privatisation

A

Selling state owned assets to the private sector

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6
Q

Eval of privatisation

A

Improved efficiency (S)
Possibility of natural monopolies (W)

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7
Q

Deregulation

A

Removal of legislation in a particular market making it more competitive

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8
Q

Evaluation of deregulation

A

Greater comp - increased choice / lower price (S)
Natural monopolies - forces smaller firms to leave (W)

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9
Q

Subsidies

A

Government support offered to producers
Lower costs of production

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10
Q

Eval of subsidies

A

Lower prices due to lower costs (S)
Gov would need to raise tax to afford (W)

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11
Q

Competition policy

A

Ways gov regulate market / monopolies
Aims to restrict monopolies
Reduce barriers to maintain comp

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12
Q

Eval of comp policy

A

Keeps prices low for consumers (S)
Decline in innovation (W)

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13
Q

SSP improvement

A

Shifts LRAS right if in
Infrastructure
Education
Training
R+D

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14
Q

Reforms in tax system + benefits

A

Lower taxes + lower benefits = more workers
Higher taxes + higher benefits = less workers

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15
Q

Labour Market Flexibility

A

How easy it is for workers to change jobs / find new types of jobs
Easier for firms to hire / fire

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16
Q

Ways of increasing labour market flexibility

A

Reduce min wage
Increase training / education
Encourage immigration
Reduce legislation on labour market protection