SUPPLY SIDE POLICIES

Question 1

WHAT ARE SUPPLY SIDE POLICIES?

Answer 1

POLICIES IMPLEMENTED BY THE GOVT DESIGNED TO INCREASE THE PRODUCTIVE POTENTIAL OF THE ECONOMY.

Question 2

WHAT ARE MARKET BASED SUPPLY SIDE POLICIES?

Answer 2

POLICIES IN WHICH THE GOVT WITHDRAWS ITSELF FROM RESOURCE ALLOCATION, ENLARGING THE ROLE FOR THE PRIVATE SECTOR AND FREE MARKET FORCES.

Question 3

WHAT ARE EXAMPLES OF MARKET BASED POLICIES?

Answer 3

1. REDUCING THE TAX BURDEN
2. LABOUR MARKET REFORMS
3. PRIVATISATION
4. DEREGULATION

Question 4

WHAT ARE INTERVENTIONIST SUPPLY SIDE POLICIES?

Answer 4

POLICIES WHERE THE GOVT INCREASES ITS ROLE IN RESOURCE ALLOCATION.

Question 5

WHAT ARE EXAMPLES OF INTERVENTIONIST SUPPLY SIDE POLICIES?

Answer 5

1. EDUCATION AND TRAINING
2. INFASTRUCTURE INVESTMENT
3. COMPETITION POLICIES

Question 6

WHAT ARE THE ADVANTAGES OF SUPPLY SIDE POLICIES?

Answer 6

1. INCREASED ECONOMIC GROWTH
2. INCREASED PRODUCTIVITY
3. REDUCED UNEMPLOYMENT
4. REDUCED INFLATION
5. CROWDING IN

Question 7

WHAT ARE THE DISADVANTAGES OF SUPPLY SIDE POLICIES?

Answer 7

1. TIME LAG
2. OPPORTUNITY COST OF GOVT SPENDING
3. BUDGET DEFICIT INCREASES LEADING TO GREATER NATIONAL DEBT