Supply Side Policies Flashcards
(9 cards)
1
Q
What are supply side policies?
A
Policies that improve productive potential/capacity of an economy. (Shifts LRAS right)
2
Q
What are the 2 types of supply side policies?
A
- Market led policies
- Government intervention
3
Q
What is the aim of market led policies?
A
Government has less of a role in the economy.
4
Q
What is the aim of government intervention?
A
Government has more of a role in the economy
5
Q
What are the government intervention policies?
A
- More gov spending on education
- More gov spending on infrastructure
- Subsidies to promote investment
6
Q
What is production?
A
The value of output of goods & services
7
Q
Market led policies
A
- Lower corporation tax
- Privatisation
- Deregulation
8
Q
Why are supply side policies not always successful?
A
- No gaurantee of success
- Cost to implement
- Time lags
- Output gap
9
Q
What is productivity?
A
A measure of the efficiency of the factors of production.
