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Supply Side Policies - Coggle Diagram
Supply Side Policies
Interventionist
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Encourage mergers, insdustrial reforms
Benefits
Subsidies will help in long run, protect new/old companies from foreign competition and promote employment
Promote consumption and production, positive externalities
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Market Oriented
Encouraging Competition
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Deregulation (liberate markets, may also reduce prices)
Reduce government expenditure (Allow private companies to increase and no increase in AD if COE) Increase I without DD pull inflation
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Labour Market Reforms
Removing trade union powers create flexibility in wages (lower wages increase SRAS and also increases LRAS)
Remove min wage laws, if it is above market equil, it will lower wage costs increase SRAS)
Abolishing immigration laws, increase inward flow of labour lesser wages, increase SRAS
Removal of min wage may result in more labour, increase LRAS
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