2.3 unemployment (solution - supply side policy)

Question 1

what is supply side policy

Answer 1

refers to economic strategies aimed at increasing the productive capacity of an economy by improving the supply of goods and services

Question 2

advantages of supply side policy

Answer 2

By enhancing productivity, supply-side policies can lead to higher economic growth rates

can stimulate investment and lead to job creation

increased supply can help keep prices stable, reducing inflationary pressures

can improve a country’s competitiveness in global markets

Supply-side policies often focus on structural changes, leading to sustainable long-term economic improvements

Question 3

disadvantages of supply side policy

Answer 3

The effects may take time to materialise, delaying their impact on the economy

Some supply-side measures may disproportionately benefit higher-income individuals or businesses, widening income inequality

excessive government intervention in markets can lead to inefficiencies and distortions

Initial implementation costs may be high

Focusing too much on supply-side measures may neglect demand-side factors that also drive economic growth