What is the primary goal of supply-side policy?
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B. To increase the productivity of the economy's resources Supply-side policy aims to boost the economy's ability to produce goods and services, not just increase demand or reduce government spending.
Which of the following is an example of a supply-side policy?
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B. Implementing education and training programs Education and training programs aim to improve the skills of the workforce, increasing the productivity of resources.
How might deregulation affect the economy?
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A. It could lead to more competition and innovation Deregulation can remove barriers to entry, encouraging more firms to enter the market and increasing competition and innovation.
What is likely to be the effect of privatisation on efficiency?
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B. It could lead to increased efficiency due to profit incentives Privatisation can introduce profit incentives, encouraging firms to operate more efficiently.
How might investment in infrastructure affect the economy's productive potential?
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B. It could increase the economy's productive potential by improving the quality of infrastructure Investment in infrastructure can improve the quality of roads, ports, and other facilities, making it easier and cheaper for firms to produce goods and services.
What is likely to be the effect of a policy that aims to increase competition in the economy?
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B. It could lead to lower prices and increased variety for consumers Increased competition can encourage firms to lower prices and innovate, providing more variety for consumers.
How might a policy that aims to reduce unemployment benefit levels affect the economy?
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B. It could encourage people to seek work, increasing the size of the labour force Reducing unemployment benefit levels can encourage people to seek work, increasing the size of the labour force and potentially boosting economic growth.
What is likely to be the effect of a policy that aims to increase the mobility of labour?
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B. It could help to match workers with jobs, reducing frictional unemployment Increasing the mobility of labour can help to match workers with jobs, reducing frictional unemployment and potentially boosting economic growth.
How might a policy that aims to increase the flexibility of the labour market affect wages?
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B. It could lead to lower wages for some workers Increasing the flexibility of the labour market can make it easier for firms to adjust wages, potentially leading to lower wages for some workers.
What is likely to be the effect of a policy that aims to increase the mobility of capital?
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B. It could lead to more investment in productive activities Increasing the mobility of capital can encourage firms to invest in more productive activities, potentially boosting economic growth.
How might a policy that aims to increase the mobility of resources affect the allocation of resources?
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B. It could lead to a more efficient allocation of resources Increasing the mobility of resources can help to match resources with their most productive uses, leading to a more efficient allocation of resources.
What is likely to be the effect of a policy that aims to increase the mobility of goods and services?
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B. It could lead to lower prices and increased variety for consumers Increasing the mobility of goods and services can encourage firms to lower prices and innovate, providing more variety for consumers.
How might a policy that aims to increase the mobility of information affect the economy?
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B. It could lead to more informed decision-making by consumers and firms Increasing the mobility of information can help consumers and firms to make more informed decisions, potentially boosting economic growth.
What is likely to be the effect of a policy that aims to increase the mobility of technology?
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B. It could lead to more rapid diffusion of new technologies Increasing the mobility of technology can help to spread new technologies more quickly, potentially boosting economic growth.
How might a policy that aims to increase the mobility of ideas affect the economy?
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B. It could lead to more innovation and creativity Increasing the mobility of ideas can encourage more innovation and creativity, potentially boosting economic growth.