3.7 Supply side policies

Question 1

Supply side policy definition

Answer 1

Policy that increases the productive potential, which is the ability of the economy to supply more goods and
services

Question 2

Economic growth

Answer 2

Supply in an economy increases causing economic growth

Question 3

Unemployment

Answer 3

Demand and supply increase and this results in more workers being employed

Question 4

Distribution of income and wealth

Answer 4

Can reduce the income gap through the provision of benefits and taxation

Question 5

Inflation

Answer 5

Reduces inflation as productivity increases and more can be produced reducing demand-side pressure.

Question 6

Problems of supply-side policy

Answer 6

Time lags
Costs
Unintended effects