33 - Supply side policies

Aggregate supply

Total amount of g+s produced in a country at a given price level in a given time period

Supply side policies

gov measures designed to increase aggregate supply in the economy

Supply side policy aims

Improve flexibility in labour markets

Restore incentive to work

Promote competition

Increases investment

Impact of supply side policies on productivity

Improved flexibility, more education + training, efficiency

Impact of supply side policies on total output

Output increases, national income increases, demand-pull inf + unemployment falls

Impact of supply side policies on privatisation

More competition

Better quality

Lower prices

More econ growth

Impact of supply side policies on deregulation

Less paperwork + rules

Less committees + licenses

More competition

Impact of supply side policies on education + training

Increases, more productivity, more expensive

Impact of supply side policies on unemployment

Projects in worse regions

impact of supply side policies on infrastructure spending

Increases productive potential + human capital

Impact of supply side policies on low business taxes

less tax on profits, more investment

Offset cost investment against tax

Impact of supply side policies on low income taxes

More incentive to work

Other gov controls

Pass legislation: protect environment + costs may inhibit growth