Supply side policies

Question 1

What is the main aim of supply side policies

Answer 1

To increase aggregate supply

Question 2

What are the two different types of supply side policies

Answer 2

Interventionist (government becomes more involved)
Market based (government becomes less involved)

Question 3

Increasing … in the market will increase efficiency and productivity

Answer 3

Competition

Question 4

What are the interventionist supply side policies

Answer 4

• increased infrastructure spending
• increased education spending
• increased health care spending

Question 5

What are the market based supply side policies

Answer 5

• privatisation
• deregulation
• reduced income tax
• reduced corporate tax
• reduced benefits
• reduced minimum wage

Question 6

Define privatisation

Answer 6

The selling of government owned businesses into the private sector

Question 7

Market based policies are policies that encourage … , market … and create incentives

Answer 7

1. Competition
2. Reform

Question 8

Interventionist policies are policies that require … … to boost the economy

Answer 8

1. Government
2. Intervention

Question 9

Describe how each increased infrastructure spending affects AS

Answer 9

• increased infrastructure increases the geographical mobility of workers, reducing travel time, making communication quicker, increasing availability at work, workers can work for longer, increasing productivity, increased AS