Supply-side policies

Explain how supply-side policies can help to achieve a low, stable rate of inflation.

Which one of the following is a supply-side policy that is most likely to lead to an improvement in the balance of trade in goods and services on the current account of the UK’s balance of payments?

After considering Extract D, and the original evidence in Extracts A, B and C, would you recommend that the Government continue to subsidise firms to encourage them to set up gigafactories to produce batteries in the UK?

Justify your recommendation.

Extract B (lines 4–5) states: ‘Historically, productivity has increased over time, which has contributed to real wage rises and improved living standards.’

Using the data in the extracts and your knowledge of economics, assess the view that the government should make raising productivity a priority in order to improve living standards in the UK.

A government introduces a number of supply-side policies that increase the size of the country's working population and labour productivity. All other things being equal, which one of the following statements identifies the most likely effects of the policies on the country's economy?

After considering Extract D, and the original evidence in Extracts A, B and C, would you recommend that the government intervene in the economy to try to reduce the differences in the economic prosperity of the various regions of the United Kingdom?

Justify your recommendation.

Figure 8 shows the aggregate demand curve (AD) and the long-run aggregate supply curves (LRAS) for an economy.

A redistribution of government spending from spending on welfare towards the funding of research and development shifts the long-run aggregate supply curve from

Which one of the following is the most likely effect of this policy?

Evaluate the view that supply-side improvements in the UK economy can best be achieved through the use of interventionist policies.

Which one of the following is a supply-side policy aimed at reducing the natural rate of unemployment?

After considering Extract D, and the original evidence in Extracts A, B and C, would you recommend that the UK government provides financial and other support to companies involved in the production of commercial aircraft? Justify your recommendation.

Extract F (lines 7–8) states: ‘Economists said the data reinforced the view that the slump in South Korea’s trade-reliant economy would continue beyond this year’.

Using the data in the extracts and your knowledge of economics, evaluate policies which could be used to boost South Korea’s exports and increase its trade surplus.

Which one of the following statements regarding supply-side policies is correct?

Supply-side policies

Extract B (lines 13–14) states: ‘It can be argued that supply-side reforms have gone too far in creating a highly flexible workforce and the government needs to do more in terms of protecting the nation’s workers ’.

Using the data in the extracts and your knowledge of economics, evaluate the view that free market supply-side reforms to labour markets are beneficial to the UK economy.

Extract F (line 1) states ‘In most of the UK, reducing the budget deficit has focused on austerity rather than tax rises.’

Using the data in the extracts and your knowledge of economics, evaluate the view that there is a strong case for significant increases in UK income tax rates.

Which one of the following policies is most likely to improve the supply side of the

The diagram below shows the aggregate demand (AD) curve, the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve for an economy. The economy’s initial equilibrium is at E₁.

The government wants to achieve economic growth without conflicting with its long-run objective of price stability. All other things being equal, which one of the following policy combinations is most likely to enable the economy to achieve a new long-run equilibrium

Explain how government policies can reduce the natural rate of unemployment.

Evaluate the economic consequences for the UK economy of a significant shift in the burden of taxation from direct taxes to indirect taxes.

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