Supply Side Policies Flashcards
What are Supply Side policies
How changes in the LRAS affects the economy
What does the LRAS show
The productive potential of the economy
Where do most supply side improvements originate from
The private sector - government can use supply side policies to increase output
How do supply side policies mainly work
Through their impact on individual markets
What can supply side policies be split into
Market based policies
Interventionist policies
What are market based policies
Policies designed to remove barriers to the efficient working of free markets
What are interventionist policies
Policies designed to correct market failure
What areas does interventionist supply side policies argue require government intervention
Human capital
Education
Health Services
Examples of areas of investment in human capital
Training and education
Health care services
Access to services
Why may there be investments in new technology
Helps R+D - development of technologies
What is Infrastructure
A type of physical capital
What does better infrastructure do
Increases efficiencies in production as it lowers costs
Improves labour productivity
Describe industrial policies and what are they
Government policies designed to support the growth of the industrial sector of an economy
Human capital, new technologies and infrastructure
What can market based supply side policies be split into
Encouraging competition
Labour Market Reforms
Incentive Related Policies
How may a government encourage competition
Privatisation Deregulation Private financing of public sector projects Outsourcing to the private sector Restricting monopoly power Trade liberalisation
