Supply Side policy Flashcards
The effect of supply side policy…
Shirts LRAS to allow an increase in real GDP without a rise in price level
The supply side policy aims to…
Increase AS in order to increase the economy’s productive capacity, helping to prevent inflation, decrease unemployment and improve the long run economic growth
In terms of the economic cycle supply side policies allows…
For sustained periods of non inflationary growth and economic stability
International competitiveness is determined by…
Both the price and quality of its goods and services relative to those of other countries
Factors that effect international competitiveness include
- costs of production
- productivity
- the exchange rate
International competitiveness is usually measured by..
Relative unit labour costs however this does not take into account the quality factors
