4.5 supply side policy

Question 1

Supply-side policies:

Answer 1

policies that seek to increase the production capacity of
an economy by

Question 2

how do supply-side policies work

Answer 2

increasing the quality and quantity of factors of production

Increasing production efficiency

Question 3

direct intervention of supply-side policy

Answer 3

education and training to increase workers skills , infrastructure investment in e.g. roads to make it cheaper to produce and labour market reforms

Question 4

market-based supply-side policy

Answer 4

-encourage competition
-incentive related policys

Question 5

how to encourage competition

Answer 5

1. privatisation of public companies as private companies are incentive by revenue
   2.deregulation which is the reduction of policies in a specific industry to make it easier for private firms to enter the market.

Question 6

Incentive related policies

Answer 6

1.lowering direct taxes to decrease prices and increase work incentives as reward is higher also this may increase investment of firms as more revenue is earned

Question 7

Market reforms

Answer 7

1.decreasing unemployment benefits to incentive work
2.ending min wage as it is cheaper to hire workers which will increase demand and therefore increase employment
3.reducing the power of trade unions to decrease their benefits