786_Madina
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Can anyone explain me about supply side policies.
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Dr J
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They are policies that aim to increase the LRAS in the economy. E.g. they have to increase the quantity and quality of factors of production within an economy to increase potential productive capacity.
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Samiik
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Supply side policies are policies designed to increase the productive capacity of an economy. For example, investment in education and training is a supply side policy as it leads to more people being employed which increases the productive potential of the economy as more people are working so more output.
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Dr J
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(Original post by Samiik)
Supply side policies are policies designed to increase the productive capacity of an economy. For example, investment in education and training is a supply side policy as it leads to more people being employed which increases the productive potential of the economy as more people are working so more output.
The point is to increase occupational mobility of labour and human capital which increases quality of labour hence productivity of labour. This increase LRAS, simply saying more will be employed is demand side...
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786_Madina
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Thank u Soo much.
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