Unit 3.7 · Supply-side Policies
Demand-side Effects of Supply-side Policies
AO2
Syllabus Requirement
Supply-side policies may also increase aggregate demand by improving confidence, income, and investment.
Assessment Objectives
AO2Application and Analysis
Summary
Supply-side policies are government strategies aimed at enhancing the productive capacity of an economy over the long term. These policies focus on improving the quality and quantity of production factors, which can lead to increased national output and economic growth without causing inflation. Understanding these policies is important in IB Economics as they illustrate how governments can influence economic performance.