SUPPLY SIDE POLICIES

Question 1

WHAT IS THE AIM OF SUPPLY SIDE POLICIES

Answer 1

The aim of supply side policies is to expand the productive potential

Question 2

SUPPLY SIDE POLICIES IN THE PRODUCTIVE MARKET

Answer 2

➸Creates incentives for the firm to invest
➸Trade liberalisation
➸Encourages competition

Question 3

SUPPLY SIDE POLICIES IN THE LABOUR MARKET

Answer 3

➸Reduces unemployment benefits
➸Reduces income tax
➸Improve education and training
➸Reduce regulation on firms

Question 4

BENEFITS OF SUPPLY SIDE POLICIES

Answer 4

➸Unemployment should fall
➸Cost push inflation should be reduced
➸Increases international competitiveness

Question 5

NEGATIVES OF SUPPLY SIDE POLICIES

Answer 5

➸Can take a long time to see results
➸Unintended consequences
➸Can be unfair

Question 6

FREE MARKET SUPPLY SIDE POLICIES

Answer 6

Aim to increase efficiency by removing things which interfere with the free market. This includes;
➸Tax cuts
➸Privatisation
➸Deregulation

Question 7

INTERVENTIONALIST SUPPLY SIDE POLICIES

Answer 7

Usually aimed to correct market failure. Could include;
➸Government spending on education
➸Subsidies for R&D
➸Funding for infrastructure improvements