Supply Side Policy

Question 1

What is supply side policy

Answer 1

Government attempts to increase productivity and shift aggregate supply to the right

Question 2

What do supply side policies focus on??

Answer 2

Improving the quantity and quality of the 4 factors of production ( land, labour, capital and enterprise)

Question 3

What are the two types of policy??

Answer 3

Free market policies and interventionist supply side policy

Question 4

What are free market policies??

Answer 4

Policies to increase competitiveness and amount of market competition eg privatisation of businesses increase number of businesses in private sector market

Question 5

What are interventionist polices??

Answer 5

Government intervention to overcome market failure eg higher spending on infrastructure/ communication

Question 6

5 examples of supply side policies

Answer 6

1) deregulation/ cutting red tape
2) privatisation
3) reduced income tax
4) deregulate labour markets(easier to hire/ fire workers)
5) reduces trade union power

Question 7

What does LIFE stand for

Answer 7

Labour
Industry
Finance
Enterprise

Question 8

What does EPIC stand for

Answer 8

Efficiency
Productivity
Incentive
Competition