2.6.3: Supply- Side Policies Flashcards
1
Q
What are the aims of supply side policies?
A
-aimed at increasing productive potential of the economy
2
Q
What are the two types of supply side policies?
A
- Market Based (free market)
- Interventionist
3
Q
What are market based supply side policies?
A
- Reducing income and corporation tax
- Privatisation
- Reducing or abolish NMW
4
Q
How does reducing tax affect supply?
A
- This increases the incentive to supply
- This is businesses have more money for production
5
Q
How does privatisation affect supply?
A
- Selling nationalised companies to private sectors
- Or deregulation, reducing regulations on businesses which restrict entry into the market, makes firms more competitive
6
Q
How does reducing/ abolishing NMW affect supply?
A
- Reducing the NMW will allow free market forces to decide wages and the labour market should clear
- Reduced unemployment= increased productive potential
7
Q
How does improvement in infrastructure affect supply?
A
- with infrastructure improvement such as roads and transport links help reduce travel times for work, improving productivity for workers
8
Q
How does improving education affect supply?
A
- increasing funding to schools and universities improve labour productivity and improve the skills of workers for the future
9
Q
How does vocational training affect supply?
A
- government schemes for vocational training such as apprenticeships help provide new skills to those who lose jobs.
10
Q
How does housing supply affect supply?
A
- Increasing supply of council housing improves geographical mobility for work.
11
Q
How does spending on healthcare affect supply?
A
- public spending on health can reduce hour lost to ill health, which improves uk productivity in the workforce.
12
Q
What are interventionist supply side policies?
A
- Public sector investment
- Improvement in education
- Vocational training
- Increasing housing supply
- Increase in healthcare spending
