Supplyside policies

1. What is the primary goal of supply-side policies?

• Reducing interest rates
• Reducing government spending
• Enhancing productive capacity
• Increasing taxes

2. Which policy aims to improve market competition?

• Nationalisation
• Deregulation
• Increasing tariffs
• Increasing union power

3. Which of the following is a market-based policy?

• Providing free healthcare
• Deregulation
• Direct investment in R&D
• Subsidising education

4. What is the aim of cutting personal income tax under supply-side policies?

• Reducing inflation
• Reducing unemployment
• Increasing government revenue
• Increasing incentives for work and investment

5. How does privatisation improve efficiency?

• Increases government control
• Reduces competition
• Encourages market competition
• Lowers labour productivity

6. Which is a potential downside of reducing unemployment benefits?

• Higher labour costs
• Reduced income for the unemployed
• Higher taxes
• Increased inflation

7. Why might supply-side policies take a long time to show effects?

• Immediate impact on demand
• Time lags in project approval and implementation
• Quick adjustment in labour markets
• Instant investment response

8. What does trade liberalisation aim to achieve?

• Increasing tariffs
• Restricting foreign goods
• Reducing trade barriers
• Increasing subsidies

9. Which diagram is used to illustrate supply-side policies' impact on long-term growth?

• Phillips Curve
• AD/AS model with LRAS shift
• Laffer Curve
• Keynesian Cross

10. How can reducing corporate taxes influence investment?

• Decrease in business profits
• Increase in production costs
• Reduction in incentives for innovation
• Increase in after-tax returns