SUPPLY SIDE POLICIES

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  • SUPPLY SIDE POLICIES
    • INCREASING LABOUR MARKET FLEXIBILITY
      • WEAKEN TRADE UNION POWER
      • REDUCING UNEMPLOYMENT BENEFITS
    • INVEST IN EDUCATION & IMPROVE QUALITY OF FUTURE LABOUR
      • THIS MEANS FUTURE WORKERS WILL HAVE BETTER SKILLS
      • IMPROVES THE QUALITY OF LABOUR
    • INVEST IN INFASTRUCTURE (ROADS AND OTHER TRANSPORT FACILITIES)
      • IMPROVING THE EFFICIENY OF TRANSPORTATION = SUCCESSFUL SUPPLY SIDE POLICY
      • HELP BUSINESSES REDUCE COSTS AS TRANSPORT WILL BE QUICKER (COST OF PETROL AND DRIVING)
        • VERY EXPENSIVE AND DISRUPTS LOCAL AREA IN TIME IT TAKES TO BUILD ROAD/NOISE AND AIR POLLUTION
      • IMPROVING QUALITY OF ROADS WILL SLOW THE RATE AT WHICH VEHICLES DEPRECIATE (WEAR & TEAR)
    • GIVING SUBSIDIES TO HELP BUSINESSES REDUCE COSTS
      • VERY EXPENSIVE IN THE SHORT RUN HOEVER THE BUSINESS CAN PAY THE GOV. BACK WITH TAX
      • IF THE IDEA IS GOOD ENOUGH THEN A BANK WILL LEND MONEY
      • IF A BANK SAYS NO WHY SHOULD THE GOV. SAY YES
  • DECREASING THE N.M.W
    • INCREASING LABOUR MARKET FLEXIBILITY
      • WEAKEN TRADE UNION POWER
      • REDUCING UNEMPLOYMENT BENEFITS
  • THESE ACTIONS ARE LIKELY TO REDUCE THE WAGE RATE AND FORCE PEOPLE TO ACCEPT LOWER WAGES
    • DECREASING THE N.M.W
    • AN EFFECTIVE POLICY HOWEVER REMOVES SOME RULES THAT WERE PUT TO PROTECT WORKERS

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