Scarlettcake
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Surely lower income taxes and reduced welfare benefits are fiscal policies not supply side policies?
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Scarlettcake
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It’s fine I have figured it out now 🙈
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jpt4749
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Fiscal policy is when government either increase its expenditure or lower taxes to stimulate the private spending. This will shift the AD curve to the right, increasing the price level and income/output.

Supply side policy tends to improve the productive capacity so it will increase and shift AS curve to the right. This will increase employment without raising the price so the inflation can be controlled.

I hope this is helpful ^_^
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Scarlettcake
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(Original post by Nathan9087)
Fiscal policy is when government either increase its expenditure or lower taxes to stimulate the private spending. This will shift the AD curve to the right, increasing the price level and income/output.

Supply side policy tends to improve the productive capacity so it will increase and shift AS curve to the right. This will increase employment without raising the price so the inflation can be controlled.

I hope this is helpful ^_^
Thank you! If I actually read the book properly and turned over the page it explained it with the laffer curve and things
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