Supply side policies

Question 1

What is a supply side policy

Answer 1

Policies which aim to increase the productive capacity of the economy and efficiency

Question 2

Give 5 factors which aim to increase supply in the economy

Answer 2

-Decrease in corporate tac
-Increase in minimum wage
-Increase in R&D
-Tariffs
-Education

Question 3

Give 5 aims of SSPs

Answer 3

• Increase occupational & geographical mobility of labour
• Promote competition and stimulate innovation
• Economic diversification (more varieties)
• Encourage start ups of new businesses
• Improve incentives to work & invest in peoples skills

Question 4

What do we mean by the UK has a productivity gap

Answer 4

This means that in general, our workers have less productivity and we grow more slowly than our rivals (last 20 yrs)

Question 5

Give 5 reasons why the UK has poor supply side policies

Answer 5

• Since covid, 2.5m people become economically inactive
• Ageing infrastructure - rise in pollution & risk to floods
• Regional economic imbalances
• Low investment in R&D - shareholder culture
• Productivity gap

Question 6

Find 3 current examples of UK SSPs

Answer 6

Google

Question 7

What do we mean by regional economic imbalances

Answer 7

GDP per head in LDN is higher than everywhere else in the UK (North/south divide)