supply side policies Flashcards

1
Q

Aggregate supply

A

-Total value of planned production by domestic firms of goods and services over a period of time
-Productive capacity of an economy

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2
Q

-Importance of supply side policies

A

-Provides long term platform for growth without inflation
-higher productivity leads to better living standards
-more competition leads to lower prices and welfare gains
-The UK becomes more competitive in global markets

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3
Q

Determinants of long term trend rates

A

-Investment in capital leads to higher productive capacity - quantity increases
-Technological developments increase productivity of capital
-Labour productivity is determined by levels of training, education, qualifications, skills, motivation
-Flexibility and mobility of factors of production
-Public sector investment

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4
Q

supply side policies are designed to

A

-improve incentives for people to find and get new jobs
-increase productivity of labour and capital factor inputs
-improve occupational and geographical mobility of labour to reduce unemployment
-increase level of capital investment and research and development spending by firms
-stimulate inflows of overseas capital investment
-promote more competition within and between markets
-stimulate invention and innovation
-provide a platform for inflationary growth

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5
Q
A
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