supply side

The Importance of Supply Side Policies

The Importance of Supply Side Policies

Supply side policies are government policies which seek to increase the productivity and efficiency of the economy. They can involve interventionist supply side policies (e.g. government spending on education) or free market supply side policies (e.g. reduce government legislation) The main macro economic objectives of the government include: Higher economic growth Low inflation Low Unemployment Equilibrium on the balance of payments Quite often these objectives conflict with each other. For example, expansionary fiscal policy may contribute to higher economic growth and lower unemployment; however, it will be at the cost of inflation and a…