Supply-side Policies Flashcards
What is the purpose of supply-side policies?
Supply-side policies are policies that focus on increasing the supply of goods and services in an economy. The idea is that by increasing the supply of goods and services, the economy will grow and become more productive
What are the different types of supply side policies?
Tax cuts, Deregulations, Education and training, Infrastructure investment?
What can Tax cuts do for supply-side policies?
Tax cuts: Reducing taxes can give businesses and individuals more money to invest and spend, an example could be through different business growths or investing in new machinery. Doing this would increase efficiency and productivity, which can lead to increased economic activity and growth.
What can Deregulation do for supply-side policies?
Deregulation: Removing government regulations can reduce the costs of doing business which would lead to an increase in supernormal profits and encourage innovation. Via through innovation this can be done on new machinery for example which would lead to an increase in efficiency and productivity eventually leading to increased supply.
What can Education and Training do for supply-side policies?
Education and training: Investing in education and training can increase the skills and productivity of the workforce, which can increase the efficiency and the supply of skilled labour and boost economic growth which would help for long term too.
What can Infrastructure Investment do for supply-side policies?
Infrastructure investment: Building roads, bridges, and other infrastructure can increase the efficiency of the economy and make it easier for businesses to produce and transport goods and services.
