Chapter_28_-_Supply_side_policies
Chapter_28_-_Supply_side_policies
Supply Side
Policies
Sweedil Dsouza Mascarenhas
Learning objectives
Cost of
Firms are
Increase the production &
Productive able to sell
skills Quality of
more
goods
Improving education and training
Economic Stable
growth prices
Aims
Redistributio BOP
n of income
stability
Effects of supply-side policy on
government macroeconomic aims
BOP
• Since supply side policy can improve
productivity and output without increasing
general price level leading to better
• Greater investment in
education and training along
with lower taxes benefit the
Redistribution low income group
of income
This ppt is for educational purpose
only
▪ In the case of some supply-side policy measures there is a time lag involved. For
example, it can take some time before the effects of improved education and
privatisation are experienced. In addition, some supply-side measures can be expensive.
This ppt is for educational purpose
only
Figure shows aggregate supply rising in line with aggregate demand.
Such a combination enables output and employment to increase
without inflation.