Supply side policy

Question 1

What is supply-side policy?
What is productive potential ?
What does this often mean ?

Answer 1

Any policy that results in the increase in total supply of goods and services in a country .
Its the ability of an economy to supply more goods and services(often means increasing productivity)

Question 2

What are two general important points about supply-side policies ?

Answer 2

By increasing output, they help to reduce inflation.
Only work in long term

Question 3

Give some examples of supply-side policies ?

Answer 3

Privatization,Education and training,limiting power of trade unions,,Reducing benefits,Competition policy ?

Question 4

Explain how competition policy works ?

Answer 4

When a government has control of monopolies increasing competition leads to lower policies

Question 5

Explain how privatization works.

Answer 5

Increases competition leading to greater efficiency and output .
Exports are more competitive helping ti improve the balance of payments

Question 6

Explain how limiting power of trade unions work ?

Answer 6

Reduces the amount of strikes and other industrial disputes

Question 7

Explain how education and training work.

Answer 7

Better education and traning improves workers skills and quality of labour