4.6.1 Objectives of Supply-Side Policies

• What is the primary goal of supply-side policies in the economy?

  Boost aggregate supply
• Match the supply-side policy with its example:

  Tax cuts ↔️ Reduced income taxes

  Deregulation ↔️ Removal of trade barriers

  Education investment ↔️ Funding vocational training
• Supply-side policies are crucial for enhancing an economy's productive capacity
• One of the primary objectives of supply-side policies is to increase economic growth by enhancing factors of production.


  True
• How does deregulation impact economic growth?

  Fosters competition
• Supply-side policies aim to create an environment conducive to long-term, sustainable economic growth
• What is the primary objective of supply-side policies?

  Increase economic growth
• Match the supply-side policy with its impact on economic growth:

  Tax Cuts ↔️ Increase disposable income

  Deregulation ↔️ Fosters competition

  Education and Training ↔️ Improves workforce skills
• Supply-side policies are government interventions designed to increase the productive capacity
• Supply-side policies focus on increasing aggregate supply
• Supply-side policies aim to improve labor market flexibility to reduce unemployment.


  True
• Objectives of supply-side policies

  1️⃣ Economic Growth

  2️⃣ Reduced Inflation

  3️⃣ Improved Competitiveness
• Unlike demand-side policies, supply-side policies address the long-term capabilities of an economy.


  True
• Tax cuts encourage investment and consumption, leading to higher productivity
• Investment in education and training improves the quality and skills of the labor force.


  True
• Steps to increase economic growth through supply-side policies

  1️⃣ Enhance labor quality

  2️⃣ Reduce barriers to competition

  3️⃣ Encourage innovation
• Supply-side policies aim to enhance the factors of production: labor, capital, and technology
• Tax cuts in supply-side policies increase disposable income, encouraging investment and consumption.


  True
• What type of incentives encourage R&D and innovation in supply-side policies?

  Tax breaks
• Investment in education and training improves the quality of labor, enhancing productivity.


  True
• Supply-side policies aim to reduce inflation by increasing aggregate supply to meet demand.


  True
• How does improved labor market flexibility reduce unemployment?

  Encourages hiring
• Order the main objectives of supply-side policies:

  1️⃣ Economic Growth

  2️⃣ Lower Inflation

  3️⃣ Improved Competitiveness

  4️⃣ Enhanced Factors of Production
• Tax cuts encourage investment and consumption
• What is enhanced by supply-side policies to boost aggregate supply?

  Factors of production
• Enhanced productivity and efficiency driven by supply-side policies lead to increased economic growth
• Supply-side policies lower inflation by expanding supply to meet demand.

  True
• What are the three factors of production targeted by supply-side policies to enhance economic growth?

  Labor, capital, technology
• Labor market deregulation increases hiring flexibility, reducing unemployment.

  True
• Match the supply-side policy with its impact on productivity:

  Tax Cuts ↔️ Encourages investment in new equipment

  Deregulation ↔️ Reduces barriers to entry
• Improving productivity is a key objective of supply-side policies because it drives long-term economic growth.


  True
• Investment in education and training improves the skills and capabilities of the workforce, enhancing labor productivity
• Steps in the process by which supply-side policies lead to sustained productivity growth:

  1️⃣ Target key areas such as labor, capital, and technology

  2️⃣ Create an environment conducive to productivity growth

  3️⃣ Sustain long-term economic output and living standards
• Supply-side policies focus on improving factors of production such as labor, capital, and technology.


  True
• How do supply-side policies contribute to economic growth and stability?

  Enhance productivity and capacity
• Supply-side policies can reduce inflation by increasing aggregate supply
• Steps in the process by which supply-side policies improve competitiveness:

  1️⃣ Foster innovation

  2️⃣ Attract foreign investment

  3️⃣ Enhance global competitiveness
• What are the main objectives of supply-side policies?

  Increase productive capacity
• Match the objective of supply-side policies with its explanation:

  Economic Growth ↔️ Enhance factors of production

  Inflation Reduction ↔️ Increase aggregate supply

  Improved Competitiveness ↔️ Encourage innovation
• Tax cuts can encourage investment and consumption, boosting overall productivity and economic growth.


  True