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Costs and benefits of supply side policies : - Coggle Diagram
Costs and benefits of supply side policies :
COST: Time lags
Takes a long time to become effective
COST: Monetary cost
costs can grow beyond estimates
COST: Opportunity cost
Undertaking one policy may involving not doing another
COST: Opposition to policies
controlling trade unions may be unpopular with those affected leading to possible strikes
COST: Equity
Cutting benefits may make the poor poorer
COST: Unintended effects
Difficult to predict the outcome
BENEFIT: Targets specific markets
Policies can be aimed at specific parts of the economy to improve efficiency
BENEFIT: Reduced inflation
output rises to combat an increase in demand thus keeping inflation under control
BENEFIT: Increased employment
Increased economic growth
Policies lead to increased output
Improved balance of payments
Policies leading to increased competitiveness will improve the balance of payments as exports are of better quality and lower priced.