Supply-side policies：練習問題

• a.

  To redistribute income more equitably from producers to workers.

• b.

  To decrease the rate of inflation by increasing the base interest rate.

• c.

  To increase the level of aggregate demand through higher consumer spending.

• d.

  To reduce production costs for firms and increase the economy's productive capacity.

• a.

  Both policies are designed to increase the base interest rate to curb inflation.

• b.

  Reduced tax increases the incentive for firms to invest, while better infrastructure improves efficiency and reduces transport costs.

• c.

  These policies primarily aim to reduce the supply of labour by encouraging early retirement.

• d.

  Reduced tax increases government revenue, while infrastructure spending reduces the national debt.

• a.Fiscal policies designed to increase the budget deficit
• b.Supply-side policies designed to increase productive capacity
• c.Protectionist policies designed to reduce the volume of imports
• d.Monetary policies designed to control the money supply

• a.

  The policies will work together to increase the level of cyclical unemployment in the long run.

• b.

  The supply-side policy will decrease the budget deficit while the monetary policy will increase it.

• c.

  The supply-side policy aims to increase long-run growth, but the monetary policy may slow down short-run economic activity.

• d.

  Both policies will lead to a significant increase in the rate of demand-pull inflation.

• a.

  A decrease in the rate of Value Added Tax (VAT) to encourage spending

• b.

  An increase in government spending on unemployment benefits

• c.

  Increased government investment in vocational education and training

• d.

  A reduction in the base interest rate by the central bank

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