4.6.1 Objectives of Supply-Side Policies

• What are supply-side policies aimed at increasing in the economy?

  Productive capacity
• Supply-side policies focus on increasing the efficiency and output of factors of production.


  True
• Supply-side policies are government policies aimed at increasing the productive capacity of the economy.
• What are examples of policies that increase productivity in supply-side economics?

  Education, training, infrastructure
• What is the overall goal of supply-side policies in the long run?

  Increase productive capacity
• Policies to increase competitiveness aim to make domestic firms more competitive globally.


  True
• Supply-side policies aim to expand the economy's long-term productive potential.
• What is an example of a policy that expands the economy's long-term productive potential?

  Encouraging innovation
• Supply-side policies focus on increasing long-term sustainable economic growth.


  True
• How does increasing productivity contribute to economic growth?

  Boosts overall output
• Steps on how increasing competitiveness contributes to economic growth

  1️⃣ Domestic firms become more competitive

  2️⃣ Investments are attracted

  3️⃣ Market share expands

  4️⃣ Exports increase
• Enhanced domestic firms attract investments and expand market share.

  True
• What is the primary goal of supply-side policies related to productivity?

  Improve efficiency and output
• Economic growth, as an objective of supply-side policies, focuses on expanding the economy's long-term productive potential.

  True
• Enhanced competitiveness of domestic firms leads to increased exports and greater market share
• What is the main focus of supply-side policies?

  Enhancing productive capacity
• What is the overall goal of supply-side policies in the long run?

  Enhance productive capacity
• Tax reductions and deregulation are examples of policies aimed at enhancing the competitiveness of domestic firms.


  True
• Enhanced competitiveness of domestic firms attracts investments and expands market share.
• What is a potential conflict between increasing productivity and enhancing competitiveness?

  High upfront costs
• Deregulation, aimed at rapid economic growth, may compromise long-term sustainability and productivity improvements.


  True
• Policies focused on rapid economic growth through deregulation may reduce long-term sustainability and productivity improvements.
• Policies that reduce taxes and deregulate industries aim to increase competitiveness.
• The overall goal of supply-side policies is to increase the economy's productive capacity.
• What does expanding the economy's long-term productive potential lead to?

  Sustainable economic growth
• Supply-side policies can lead to higher levels of sustainable employment.


  True
• The overall goal of supply-side policies is to increase the economy's productive capacity in the long run.
• Higher output with the same inputs fosters economic efficiency.
• What are two benefits of increased competitiveness in the economy?

  Attracts investments, expands exports
• Supply-side policies aim to enhance the competitiveness of domestic firms through measures like tax cuts
• How does increased productivity contribute to economic growth under supply-side policies?

  Higher output with same inputs
• Sustainable economic advancement through efficient resource allocation is a direct contribution of economic growth as a supply-side policy objective.


  True
• One objective of supply-side policies is to improve the efficiency of factors of production
• Enhancing the competitive edge of domestic firms is a key objective of supply-side policies.


  True
• Policies to improve the efficiency of factors of production, such as education, training, and infrastructure, are aimed at increasing productivity.
• How does increased productivity contribute to economic growth?

  Higher output, lower costs
• Expanding the economy's long-term productive potential leads to sustainable economic advancement.


  True
• Measures to boost competitiveness like tax cuts may reduce government revenue available for productivity-enhancing investments.
• What must policymakers balance to ensure effective supply-side policies?

  Objectives and trade-offs