Ch 18 - Supply Side Policies

In deregulation, competition tends to lead to lower prices + ________ and services.

________ SSP: policies which increase competitiveness and ________ efficiency.

________ leads to more efficiency and lower prices.

________ is important in an increasingly globalised marketplace.

________: is built in the idea that economic growth is stimulated through demand.

________ are government attempts to increase productivity and efficiency in the economy.

policies which increase competitiveness and free-market efficiency

set state owned assets to private sector, improves incentives

allows new firms to enter the market open monopolies to competition

greater incentives to work longer hours

reduce power of trade unions, minimum wage and regulations

reduce tariff barriers and obstacle to trade

increase incentive to get a job

government intervention to overcome market failure

could allow firms to not pay taxes from retained profit spent on R+D

is built in the idea that economic growth is stimulated through demand

→ main goal is to continue consumer spending on products → keep the economy afloat

the reduction of household income taxes and corporate taxes will have expansionary fiscal effects

policies which increase competitiveness and free-market efficiency

government intervention to overcome market failure

SSP will increase sustainable rate of economic growth by increasing LRAS, which enables higher rate of economic growth without causing inflation