Which statement relating to supply-side policies is correct?
They aim to increase aggregate demand.
They aim to increase the long-run capacity of the economy.
They aim to reduce cyclical unemployment.
They aim to work in the short term.
Which statement about supply-side policy is correct?
It aims to increase the productive potential of the economy.
It aims to increase total demand in the economy.
It involves changes in the equilibrium foreign exchange rate.
It involves changes in the rate of interest.
What is the main aim of supply-side policy?
increase economic growth by raising productivity
increasing the balance of payments surplus by restricting free trade
reducing the government’s budget deficit by increasing taxation
reducing the money supply by increasing the rate of interest
What is the most likely effect on an economy of a successful supply-side policy?
an increase in the general price level
an increase in the interest rate
an increase in the money supply
an increase in the potential GDP
What is the definition of a supply-side policy?
any policy designed to decrease inflation
any policy designed to decrease unemployment
any policy designed to increase imports
any policy to increase productivity
The government of country Z announces an increase in spending on work-place training. What is the effect of this supply-side policy likely to be?
a decrease in country Z’s employment rate
a decrease in country Z’s exchange rate
an increase in country Z’s economic growth rate
an increase in country Z’s interest rate
Why does more emphasis on education and training lead to an increase in national output?
It improves the productivity of the labour force.
It lowers the inputs of capital investment.
It reduces demands for higher pay.
It reduces the power of trade unions.
Which change affecting an economy’s labour market promotes economic growth?
increasing trade union strike action
lowering the age of retirement
reducing training of workers
removing immigration controls
Which supply-side policy measure would help to match the skills of workers to job vacancies?
encouraging the modernisation of factories
offering retraining to unemployed workers
reducing taxes to provide incentives to work
replacing government enterprises with private enterprises
What is a supply-side policy measure?
building more affordable housing to improve labour mobility
controlling consumer spending to reduce inflation
lowering interest rates to encourage purchase of expensive goods
raising pensions to help retired people pay their fuel bills
What is most likely to increase the occupational mobility of labour?
building more houses
increased spending on re-training schemes
increased total government spending
increasing the information on job availability
Which government intervention would increase the geographic mobility of labour?
controlling firms locating in areas of low employment
giving grants to firms moving into areas of high unemployment
providing relocation expenses for workers
subsidising declining industries
Which government action will not add directly to the quantity or quality of human resources?
improvement in health facilities
investment in education and training
provision of better food and nutrition
reclamation of land from the sea
What is a supply-side policy measure?
a tariff on imported goods
an increase in indirect taxes
a contractionary monetary policy
the removal of barriers to entry to a market
What is not a supply-side policy measure?
control of trade union power
higher indirect tax
privatisation
skills training for workers
Which government policy will increase productivity?
decreasing the number of training programmes
encouraging labour-intensive production
promoting good industrial relations
reducing private sector investment
Why might a government decide to subsidise a high-cost steel industry?
if cheaper imports of steel are improving the balance of payments
if economic growth is increasing due to the success of other industries
if redundant steel workers can easily be retrained
if unemployment in steel producing areas is increasing
China is moving towards a more mixed economic system and reducing the role of the public sector. Which economic policy measure might best achieve this?
creating excess capacity in state-owned enterprises
encouraging competition among private sector firms
protecting infant industries
subsidising transport infrastructure
A gov. significantly increases spending on education and training. What will be the likely effect on the rate of inflation in the short run and the long run?
A
B
C
D
What are the supply-side policy measures that would enable the government to make the income distribution more equal?
1, 2 and 3
1 and 2 only
1 and 3 only
2 only