4.5 Supply-side Policies

Which one of the following is NOT a supply side policy?

• the government increasing competition in all industries
• the government reducing import controls
• the government investing in training and education
• the government privatising national industries

Supply side policies are often centred on

• Raising inflation

• Changing the base rate of interest

• Investing in capital - human and infrastructure

• Changing laws

some economists argue the reduction of a minimum wage and lower welfare will help reduce unemployment 

• the cheaper wage rate will means more people will be employed 
• it provides opportunities for low skilled workers to get a job 
• the low income means people would have to work to survive 
• all of these responses 

Something that makes people want to produce more goods and services

• Incentives 
• Macroeconomics
• Inflation
• GDP

Which of the following is a factor of production?

• Output

• Start-up costs

• Productivity

• Capital

Which policy involves the government selling off nationalised firms?

• Reduce trade union power

• Privatisation

• Deregulation

• Encouraging competition

Why do supply-side policies make UK goods more competitive?

• They lead to a rise in output

• They lead to a fall in prices

• They encourage higher consumption

• They discourage monopolies

What is the key aim of supply-side policies?

• Increase economic growth

• Reduce price level

• Improve the environment

• Reduce government spending

Which of the following is a criticism of public infrastructure spending?

• Imposes a high cost on the government

• Causes consumption to decrease

• Leads to business costs rising

• Projects can take a long period of time to complete

Which of the following is the best definition of productivity?

• The ratio of total output to total inputs

• The amount of output a firm produces

• The quality of a firm's factors of production

• The number of workers in the economy