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Supply Side policies - Coggle Diagram
Supply Side policies
Specific policies
Education and training
Government assisstance to new firms
Reduction in direct taxes
National minimum wage
Reduction in benefits
Reduction in trade union powers
Privatisation
Target immigration
Supply side polices aims
Increase productive capacity of the economy
Drive long run economic growth
Reduce inflationary pressure
Reduce structural and frictional unemployment
Improve current account position
Evaluation
LAG times mean it can take years for supply side polices to increase AS
Uncertainty about their impact
Significant opportunity cost
High chance of government failure
Ineffective if there is a lack of AD in the economy