Supply Side & Monetary Policy

Supply Side Policy is

• designed to increase aggregate supply and hence increase productive potential

• implement an expansionary fiscal policy.

• reducing taxes to spend more on goods and services.

What is most likely to conflict with a government’s aim of full employment?

• Lower-income tax

• Lower spending on import

• Higher government expenditure

• Higher interest rates

What combination of macroeconomic aims is most likely to benefit from a decrease in government spending?

• A fall in imports and price stability

• Economic growth and full employment

• Full employment and a fall in imports

• Price stability and economic growth

Which of the following may reduce the effectiveness of a government policy measure?

• Accurate information

• An absence of economic problems in other economies

• An absence of policy conflicts

• A time lag

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

Choose all the type of tools that used in supply side policy

• Increasing government spending

• Improving education and training

• Deregulation

• Money flow regulation

Which is the negative effect of Privatisation?

• detrimental to the company

• There is the risk that the firms may become dependent on the subsidies.

• A Monopoly may develop

• decrease in import

Choose which is demand-side policy

• Monetary Policy

• Supply-side policy

• Macroeconomic policy

• Fiscal Policy

describe monetary policy

• Influence the supply from company

• Infuence the interest rate

• Influence the tax

• influences the supply and/or price of money.

Monetary policy aim to influence

• aggregate demand (AD)

• aggregate supply (AS)