Supply Side Policy Flashcard

Front

What is the main goal of tax cuts as a supply side policy?

Back

Stimulate economic growth

Front

Explain the concept of deregulation and how it can impact the economy.

Back

Deregulation can impact the economy by promoting competition, reducing barriers to entry for new businesses, and potentially leading to lower prices for consumers.

Front

What is privatization and how does it relate to supply side policy?

Back

Privatization promotes competition, efficiency, and innovation in the market.

Front

How does labor market flexibility contribute to supply side policy?

Back

By allowing for easier hiring and firing of workers, leading to increased efficiency and productivity in the economy.

Front

What are some examples of incentives for investment in the context of supply side policy?

Back

Tax breaks, subsidies, and deregulation

Front

Discuss the importance of infrastructure development in supply side policy.

Back

Infrastructure development enhances productivity and efficiency in the economy.

Front

How do tax cuts affect the government's revenue and spending?

Back

Tax cuts can decrease government revenue and may require a reduction in government spending.

Front

What are the potential drawbacks of deregulation in the economy?

Back

Potential drawbacks of deregulation in the economy include increased market volatility, reduced consumer protection, and potential monopolistic behavior.

Front

Explain how privatization can lead to increased efficiency in the provision of goods and services.

Back

Introducing competition, reducing bureaucracy, and incentivizing innovation and cost-cutting measures

Front

What role does technological innovation play in supply side economics?

Back

It contributes to increased productivity, efficiency, and long-term economic growth.