Suply side policys

What is the aim of suply side policies

• To increase the productive potential of an economy

What are the types of supply side policies

• Interventionist

• Market based

what are interventionist policys

government actions that involve direct intervention in the economy to influence economic activity and achieve economic objectives.

what are Market based policies

government measures that use market forces and incentives to encourage individuals and firms to change their behaviour and improve economic outcomes.

examples of intervntionist policies

• Direct spending

• change in mimimum wage

• nationalisation

• Selective imports and controls

Examples of market based policies

• Lower buisness taxes

• reduced red tape

• imporved flexibility in labour market

• deregulisation

• privatisation

• overseas trade

what do the suply side policys target

• Improve skills and quality of labour force

• improve infrastructure

• increace insentives

• promote competion

• reform labour market

Suply side policies weaknesses

• Time lags:

• High costs

• Uncertain effectiveness

• Potential inequality

• Risk of deregulation

• Opportunity cost

Suply side strengths

• Increase productive capacity (LRAS)

• Reduce unemployment:

• Lower inflationary pressure:

• Improve international competitiveness:

• Encourage investment and entrepreneurship:

• Sustainable long-run growth:

Depends on points suply side

It depends on the type of supply-side policy.

2. It depends on the time frame.

3. It depends on the state of the economy.

4. It depends on how well the policies are targeted.

• Training schemes are only effective if they provide skills that employers actually need.

• Infrastructure projects must address genuine bottlenecks.

5. It depends on the scale of implementation.