A selection of revision notes on supply side policies

The importance of the supply-side of any modern economy is hard to underestimate. Indeed so many of the key macroeconomic objectives of governments of both developed and developing countries hing on creating the conditions under which the supply-side can flourish. This revision blog links to some of our most recent blog articles on supply-side economics

Here is a reminder of the AS and A2 specification (this is for AQA)

AS
Students should understand how supply-side policies, such as tax changes designed to change personal incentives, may increase the potential output of the economy and improve the underlying trend rate of economic growth.
They should appreciate how supply-side policies also affect the level of unemployment, the rate of change of prices, and UK external performance as reflected in the balance of payments on current account.

A2
Students should develop a more sophisticated understanding of supply-side policies using A2 concepts such as progressive taxation and the natural rate of unemployment. They should understand the contribution of supply-side policies to the management of the economy and to achieving particular macroeconomic policy objectives. They should also appreciate that supply-side policies, such as tax changes, privatisation, nationalisation and labour market reforms, can have micro-economic as well as macro-economic effects.