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Supply-Side Policies
Strategies aimed at increasing the productive capacity of the economy by improving the supply-side of the economy.
Natural Rate of Unemployment
The level of unemployment that persists in an economy due to frictional and structural factors.
Free Market Supply-Side Policies
Policies that reduce government involvement to make labor and product markets more flexible and efficient.
Interventionist Supply-Side Policies
Policies supported by those who believe that government intervention is necessary to improve the operation and efficiency of markets.
LRAS (Long-Run Aggregate Supply)
Represents the total output an economy can produce when operating at full capacity.
Tax Cuts
Reductions in the rate of taxation which are designed to incentivize work and investment.
Privatization
The transfer of ownership of a business or public service from the government to private individuals or organizations.
Deregulation
The reduction or elimination of government rules controlling how businesses can operate.
Education and Training
Government spending aimed at improving the skills of the workforce to enhance productivity.
Industrial Policy
Strategic efforts by the government to encourage the development and growth of specific sectors of the economy.
Research and Development (R&D) Subsidies
Financial assistance provided by the government for projects aimed at advancing knowledge in scientific or technological fields.
Microeconomic Effects of Supply-Side Policies
Benefits such as improved labor market flexibility and productivity derived from effective supply-side policies.
Macroeconomic Effects of Supply-Side Policies
Benefits such as lower unemployment rates and higher economic growth that arise from effective supply-side policies.
Balance of Payments on Current Account
A record of all transactions made between entities in one country and the rest of the world, focusing on trade in goods and services.
Frictional Unemployment
Temporary unemployment that occurs when people are between jobs or entering the labor market.
Structural Unemployment
Long-term unemployment arising from structural shifts in the economy and changes in the job market.
Productive Potential
The maximum output that an economy can produce without triggering inflation when all resources are fully employed.
Incentives for Labour Force Participation
Factors, often influenced by tax policy, that encourage individuals to join the workforce.
Competitiveness of Exports
The ability of a country's goods and services to compete in international markets based on price, quality, and innovation.
