28 Supply-Side Policy

Market-based supply-side policies do not include _________

• tax cuts

• privatisation of state-owned assets

• deregulation

• government provision of transport infrastructure

Which statement does not apply to supply-side policies?

• Macroeconomic policies aimed at improving  the ability of the economy to increase its aggregate  supply of goods and services.

• Design to make the economy more productively efficient in the  long run

• Used to increase the productive potential of the economy

• The use and manipulation of interest rates to affect the level of economic activity

Which of the following is a supply-side policy used to reduce unemployment?

• Reduce welfare benefits to the unemployed

• Privatisation of state-owned assets

• Regulations of the financial sector

• Reduced interest rates to stimulate economic activity

Privatisation is the transfer of ...

• private sector assets to the public sector

• state-owned assets to the private sector

• sales of private sector assets

• income form private sector to the public sector

An increase on which of the following is least likely to shift the long run aggregate supply curve of an economy to the right?

• investment in education

• investment on infrastructure

• public sector spending

• spending on research and development

Which of the following is not a supply-side policy involving investment in human capital?

• schemes to increase labour mobility

• policies aimed at promoting job opportunities and growth in specific industries

• investment expenditure in education

• subsidising training programs for small and medium sized business

Which of the following is an example of labour market reform?

• reducing the power of trade union

• raising the upper rate of capital gains tax

• investment in education and training

• trade liberalization policies that encourage greater competition in a particular industries

Labour market reforms aim to increase labour market flexibility and efficiency cannot be achieved by ...

• removing the national minimum wage

• reducing unemployment benefits

• increasing subsidies paid to the strategic industries

• reducing the power of labour union

Which of the following is not a potential negative consequence of market-based supply-side policies?

• Increased inequality

• Increased negative externalities such as pollution

• Lower incentives to work

• Lower tax revenue

Which of the following is a supply side policy measure?

• A decrease in government spending on education

• A decrease in government spending on healthcare

• An increase in corporation tax

• An increase in the threshold at which people pay income tax