2.6.3: Supply-side policies

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Created by
Kendrick Lamar

Cards (23)

  • Supply side policy: Policies aimed on increasing the supply of goods and services in an economy
  • Aim of Supply-side policies: Improve incentives to work and improve the skill of labour
  • Aim of Supply-side policies: Improve labour and capital productivity
  • Aim of Supply-side policies: Encourage new businesses and startups
  • Aim of Supply-side policies: Improve price and non price competitiveness in global markets
  • Aim of Supply-side policies: Improve living standards
  • Aim of Supply-side policies: Improve regional economic balance
  • Market based SSPs: Policies removing government intervention in order to free markets
  • Types of Market based SSP: Cutting corporate and income tax allows more activity
  • Types of Market based SSP: Deregulation makes it easier for new firms to enter markets and increase competition
  • Types of Market based SSP: Reducing tariffs stimulates international trade and increases foreign investment in exports
  • Types of Market based SSP: Intellectual property protection incentivises innovation as it makes sure the creator can profit from their idea
  • Types of Market based SSP: Opening up to inward migration in order to increase demand for jobs
  • Issue with Market-based SSPs: Tax cuts increase inequality
  • Issue with Market-based SSPs: Too much power to the market may lead to market failure resulting from lack of public goods or externalities
  • A successful SSP shifts AS to the right, for both short and long run
  • Interventionist Supply-side policy: Governments intervening to improve the supply-side of the economy
  • Types of Interventionist SSP: Provision of public goods and positive externality goods
  • Types of Interventionist SSP: Investment in infrastructure
  • Types of Interventionist SSP: State ownership of key businesses, such as water and energy
  • Types of Interventionist SSP: Increased investment in education to increase occupational mobility and labour productivity
  • Issue with Interventionist SSPs: Higher regulation and tax may reduce incentive to invest and work hard
  • Issue with Interventionist SSPs: State owned businesses often become inefficient, and may have poor output