Ch24 Supply-Side Policies

Front

What is a supply-side policy?

Back

A supply-side policy is any measure designed to increase aggregate supply in the economy.

Front

What are the objectives of supply-side policies?

Back

To improve the effectiveness of the workings of product and factor markets.

Front

Name a supply-side policy tool related to education.

Back

An increase in government spending on education and training to improve productivity and provide workers with more geographical mobility and job flexibility.

Front

How does infrastructure development serve as a supply-side policy tool?

Back

It reduces costs and improves the competitiveness of a country’s products compared to other countries.

Front

What is the effect of reducing the income tax rate as a supply-side policy?

Back

More experienced workers may remain or return to the workforce, receiving a higher proportion of their earnings, which is important for reaching economic potential.

Front

What is the purpose of privatisation and deregulation in supply-side policies?

Back

To reduce costs and improve the effectiveness of markets traditionally exclusive to the public sector.

Front

How does attracting foreign workers to Singapore act as a supply-side policy?

Back

It increases the total supply of labour and, in turn, Singapore’s economic potential.

Front

What is the impact of a global recession on Singapore’s economy?

Back

There will be an exodus of non-resident foreign workers from Singapore.

Front

What are the benefits of increasing the number of migrant workers in Singapore?

Back

Real output will increase, the price level may increase if the economy is at or above full capacity, and total employment will increase, though some local workers may lose jobs if they lack skills.

Front

What happens when there is a cutback in the number of migrant workers in Singapore?

Back

Real output will fall, the price level may be unaffected or fall, and total employment will fall.