4.5.2 Supply-side policies

• One of the primary aims of supply-side policies is to lower inflation.

  True
• Supply-side policies are designed to increase the productive capacity of the economy
• Supply-side policies enhance the efficiency and quality of the economy's factors of production
• Supply-side policies target key areas such as labor market reforms and tax incentives
• Reducing employment regulations is an example of a labor market reform
• Supply-side policies focus on managing aggregate demand.

  False
• Increasing productive capacity helps reduce inflationary pressures.


  True
• Supply-side policies aim to lower inflation by increasing the supply of goods and services
• Supply-side policies can lower inflation by increasing the supply of goods and services.


  True
• Supply-side policies focus on managing aggregate demand in the short-term.

  False
• Arrange the primary impacts of supply-side policies in a logical order:

  1️⃣ Shift in Aggregate Supply

  2️⃣ Higher Economic Growth

  3️⃣ Lower Inflation

  4️⃣ Improved Competitiveness
• Increasing supply through supply-side policies can help reduce inflationary pressures
• What is one factor that can constrain the success of supply-side policies?

  Institutional rigidities
• Supply-side policies are measures aimed at increasing the productive capacity of an economy
• Match the policy type with its primary focus:

  Demand-side ↔️ Aggregate demand

  Supply-side ↔️ Aggregate supply
• Supply-side policies aim to raise employment levels.

  True
• Reducing corporate tax rates is an example of a supply-side policy.

  True
• Lowering inflation is one of the aims of supply-side policies.


  True
• Match the policy type with an example:

  Tax Incentives ↔️ Reducing corporate tax rates

  Infrastructure Improvements ↔️ Investing in transportation networks

  Education and Training ↔️ Improving vocational training programs
• Supply-side policies shift the Aggregate Supply curve to the right
• Order the objectives of supply-side policies:

  1️⃣ Increase economic output

  2️⃣ Raise employment levels

  3️⃣ Lower inflation
• Supply-side policies aim to increase the productive capacity
• Match the supply-side policy type with an example:

  Labor Market Reforms ↔️ Lowering minimum wage

  Tax Incentives ↔️ Cutting corporate tax rates

  Infrastructure Improvements ↔️ Investing in transportation networks

  Education and Training ↔️ Improving quality of education
• Supply-side policies shift the Aggregate Supply (AS) curve to the right
• Demand-side policies are designed to boost long-term productive potential.

  False
• Supply-side policies always have immediate and positive effects on the economy.

  False