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Flashcards in Suppy Side Policies Deck (23)
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1
Q

What are Supply Side Policies?

A

They are government policies which seek to increase the productivity and efficiency of the economy.

2
Q

What are the two different supply side policies?

A
  • Interventionalist

- Freem market

3
Q

Example of Interventionist supply side policy.

A

Government spending on education.

4
Q

Give an example of free market supply side policies.

A

To reduce government legislation.

5
Q

What is the problem with the governments Macro - Economic objectives?

A

They conflict with each other

6
Q

What policies will clash of there is an expansionary fiscal policy?

A

Expansionary fiscal policy may contribute to higher economic growth and lower unemployment; however, it will be at the cost of inflation and a deterioration on the current account.

7
Q

What is essential for the government to achieve all these objectives?

A

To improve the supply side of the economy.

8
Q

If the government improves productivity and pushes Aggregate Supply to the right what will happen?

A

It can enable low inflationary growth, help improve the general competitiveness of the economy.

9
Q

What are supply side objectives?

A

Improve incentives for people to look for work
Increase labour and capital productivity
Increase investment in development and research
Promote competition and stimulate a fast pace of innovation

10
Q

Supply side challenges for the uk economy

A

Persistent productivity gap
High youth unemployment
Deep regional economic divide

11
Q

How has restricting trade union reforms helped supply side policies?

A

Meant there is a great decrease in strike action

12
Q

How has increased spending on education and training helped supply side policies?

A

Education improves human capital and efficiency

Economic returns from human capital vary according to stage of development of a country

13
Q

How has income tax reforms and the incentive to work?

A

Lower rates of income tax provide a short term boost to demand

14
Q

How does Product Market reforms help with supply side policies?

A

Designed to increase competition and efficiency

  • Privatisation
  • de-regulation of markets (means opening up markets to greater competition)
  • commitment to free trade
15
Q

How does government policies affect economic growth?

A

Lower taxes on patent taxes to increase innovation

Cooperation tax cut to 20% in 2015

16
Q

What is the objective of government labour market policies?

A
  • Increasing productivity of the labour force

- Increase size of work force

17
Q

Examples of Labour Market Policies?

A
  • Education
  • Health Care
  • Training for the worker
  • Reducing Welfare benefits
18
Q

What is the objective for Government Capital Policies?

A

Improving efficiency of a market (technology, infrastructure)

19
Q

Examples of government capital policies.

A
  • Subsidies
  • Business Parks
  • Reducing the Power of Trade Unions (Government legislation has removes the purpose of trade unions, beneficial because Trade Unions reduces the productivity of the worker, because of they are not working they are not producing output)
20
Q

Is privatisation a Labour, Capital or Competition?

A

Competition

21
Q

What is Privatisation? (Competition)

A
  • Selling public owned assets to the Private Sector
  • Private sector is more efficient in running a business because they have a profit motive to reduce costs and develop better services, reduction in costs can be reflected into lower prices.
22
Q

What type of government policy is DEREGULATION?

A

Competition

23
Q

What is Deregulation? (Competition)

A
  • Reducing barriers to entry in order to make market more competitive
  • Monopolistic markets turning into Oligopolies, leads to lower prices & better quality of goods.