supply side policies

Supply side policies

Aimed at increasing the productive potential of economy, shifting lras to right

Increased incentives

Increase productive potential of labour and efficiency-encourage individuals to work harder motivate firms to invest and boost long run economic growth

Lower income tax, lower corporation tax - uk patent box-reduce corp ate tax

Improvement of skills and quality of labour force

Better education increases workers skills and knowledge, more productive and can adapt better

Produce more output per hour leading to a boost in economic efficiency

Evaluation

Time lags - take years to show results so. May take alternative routes

High costs- means they will be an increase in government spending which may create budget deficit