Exam code: 0455 & 0987
1/19
0Still learning
Know0
Define supply-side policy.
A supply-side policy is government action that aims to increase the productive potential of the economy by improving the efficiency and flexibility of markets.
What are two main ways supply-side policies can increase total supply in the economy?
Supply-side policies can increase total supply by improving the quality or quantity of the factors of production.
Supply-side policies can be represented by an outward shift of the curve.
Supply-side policies can be represented by an outward shift of the productive possibility curve.
Did this page help you?
Define supply-side policy.
A supply-side policy is government action that aims to increase the productive potential of the economy by improving the efficiency and flexibility of markets.
What are two main ways supply-side policies can increase total supply in the economy?
Supply-side policies can increase total supply by improving the quality or quantity of the factors of production.
Supply-side policies can be represented by an outward shift of the curve.
Supply-side policies can be represented by an outward shift of the productive possibility curve.
How do supply-side policies help achieve economic growth?
Supply-side policies increase the productive capacity of the economy, allowing more goods and services to be produced without causing inflation.
Define labour market reform.
A labour market reform is a policy designed to make the labour market more flexible and efficient, often by reducing regulation or making it easier to hire and fire workers.
Supply-side policies can help achieve a balance of payments by improving competitiveness in global markets.
Supply-side policies can help achieve a healthy balance of payments by improving competitiveness in global markets.
True or False?
Supply-side policies can result in lower unemployment by increasing labour market flexibility.
True.
Supply-side policies can improve workers' skills and increase job opportunities, thus reducing unemployment.
One strength of supply-side policies is that they often increase the value of , as an increase in total supply usually results in lower prices.
One strength of supply-side policies is that they often increase the value of net exports, as an increase in total supply usually results in lower prices.
Define privatisation.
Privatisation is the transfer of assets or businesses from the public sector to the private sector, often to increase efficiency and productivity.
Why do supply-side policies not cause the same inflationary pressures as demand-side policies?
Because supply-side policies increase total (aggregate) supply, allowing economic growth without putting upward pressure on prices.
True or False?
Supply-side policies always improve the distribution of income in an economy.
False.
Supply-side policies can sometimes worsen income distribution, especially if labour market reforms lower workers' wages.
Define deregulation.
Deregulation is the process of removing or reducing government rules and restrictions in order to increase efficiency and competition in markets.
Define supply-side policy.
A supply-side policy is action taken by the government to increase the economy’s productive potential by improving the efficiency and flexibility of markets.
How can supply-side policies help achieve economic growth?
Supply-side policies increase productive capacity, allowing more goods and services to be produced without causing inflation.
How do supply-side policies help achieve low inflation?
By increasing aggregate supply, supply-side policies enable economic growth without putting upward pressure on prices.
True or False?
Supply-side policies can improve the balance of payments by increasing competitiveness in global markets.
True.
Supply-side policies can improve competitiveness through higher productivity and innovation, leading to a healthier balance of payments.
Define productive capacity.
Productive capacity is the maximum output an economy can produce when using all its resources efficiently.
What is one weakness of supply-side policies related to time?
A major weakness is that supply-side policies often have significant time lags, as their benefits may take years to appear, especially for measures such as education and training.
True or False?
Supply-side policies are always beneficial for income distribution.
False.
Supply-side policies can sometimes worsen income distribution, for example when labour market reforms lower workers’ wages.