Supply-Side Policies (AQA A-Level Economics): Flashcards
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Practise the cards
10 cards from this deck
Supply-side policies
Supply-side policies
Govt measures to improve productive potential & shift LRAS right
Supply-side economics focus
Supply-side economics focus
Improving competitiveness & efficiency of markets
Market-based supply-side policies
Market-based supply-side policies
Policies that free up markets & promote competition
Interventionist supply-side policies
Interventionist supply-side policies
Govt intervenes to correct market failures
Privatisation
Privatisation
Shifting ownership from state to private sector
Laffer curve shows
Laffer curve shows
Tax revenue changes as average tax rate increases
Supply-side effect on natural unemployment
Supply-side effect on natural unemployment
Reduces it by shifting labour demand & supply curves
How supply-side policies reduce inflation
How supply-side policies reduce inflation
Cut production costs & reduce cost-push/demand-pull pressures
Supply-side effect on competitiveness
Supply-side effect on competitiveness
Creates 'lean & fit' firms with better quality goods
Backward-bending labour supply curve
Backward-bending labour supply curve
At high wages, workers supply less labour (prefer leisure)