Supply Side Policies
- Created by: JessicaDoyle1
- Created on: 18-04-16 20:17
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- SUPPLY SIDE POLICIES (polices that improve productive potential/capacity of an economy
- Privatisation
- This involves selling state owned assets to the private sector.
- It is argued that the private sector is more efficient in running business because they have a profit motive to reduce costs and develop better services.
- Deregulation
- Involves reducing barriers to entry to make markets more competitive.
- Reducing Income taxes
- Lower taxes could increase the incentive to work as workers receive a higher proportion of their wage, leading to larger output.
- Increased Education and Training
- Better education and training can improve labour productivity and increase AS.
- Reducing power of Trade Unions
- Increase efficiency of firms - less time posts to strikes
- Reduce unemployment - labour markets are competitive
- Reducing State Welfare Benefits
- Encourage unemployed to take jobs
- Providing Better Information
- May help to reduce frictional unemployment
- Deregulate Financial Markets
- Allow more competition and lower borrowing costs
- Lower Tariff Barriers
- Makes international trade easier (increases trade)
- Removing Unneccsary Red Tape
- Keeps firms costs down
- Improving Transport & Infrastructure
- Helps firms reduce costs if they can efficiently transport goods
- DeregulateLabour Markets
- Helps increase competitiveness - ease of hiring and firing workers
- Privatisation
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