Supply-side policies

• What are market based supply-side policies?

  Policies which adress measures designed to increase incentives, increase competition, and reduce regulations
• What are interventionist supply-side policies?

  Policies which adress government intervention in the market to overcome market failures,relating to measures that involve expenditure designed to increase productivity
• What are the main market based policies?

  Reduction in profit tax so that firms have a strong incentive to invest more, decreased competition to allow competitors to enter the market, and the removal of regulations that would be preventing firms from growing
• What are the main interventionist policies?

  Investment in infrastructure, incentives for investment, and improving the skills of the workforce
• What are the two main advantages of supply-side policies?

  Economic growth can be achieved without inflation pressures, and they can help increase productivity
• What are the two main disadvantages of supply-side policies?

  If AD is low, then these policies will not have an impact on real output, and they are expensive and take time to work