policies to increase growth and living standards

Question 1

Policy to increase short-run growth

Answer 1

-expansionary fiscal/monetary policy: increase gov spending, reduce tax or increase I.R.

evaluation:
-conflict of objectives: demand-pull inflation- size of output gap
-finances
-confidence
-time lags

Question 2

policies to increase long-run growth

Answer 2

-supply side policies: gov spending on ed, healthcare subsides. tax reforms, reducing benefits or min wages

evaluation:
-no guarantee of success
-time lags
-costs
-negative stakeholder impact