Supply Side Policy

Question 1

Supply side policy

Answer 1

Where a government attempts to increase short and long run aggregate supply in order to stimulate economic growth

Question 2

Supply side objectives

Answer 2

Improve economic growth
Invest In R+D
Promote competition and innovation 
Encourage business start up
Improve real GDP
Increase labour mobility 
Improve incentives to work.

Question 3

Market based supply side policies

Answer 3

Cutting government spending and borrowing - Attempt to improve the budget and reduce economic strain
Lower business tax - improves the business incentive to work and encourages more FDI
Reforming employment laws - Making work more accessible means that there is a wider supply of labour
Deregulation - Reducing barriers to entry in order to make the market more competitive.
Spending on healthcare - improves the health and strength of the workforce
Spending on education - better education and training can improve R+D and the quality of the workforce

Question 4

Increasing incentive policies

Answer 4

Lower rates of income tax - Encourages people to spend meaning businesses will want to supply more in the short run

Question 5

Improving infrastructure

Answer 5

Spending on roads and infrastructure to improve the transport of labour
Privatisation - Makes industries more competitive and reduces the costs the government faces.

Question 6

Interventionist methods

Answer 6

Government steps in to control the market

Question 7

Market-based

Answer 7

Allowing the market to remain free to increase competitiveness