Question

What are 4 policies that the supply side model supports?

Answer 1

Supply side economy prefer tax cuts and deregulation to drive economic growth. Supply side economy says increased production drive economic growth.supply side physical policy focuses on creating a better climate for business is. Its tools are tax cut and deregulation.

There are four policies that supply side model supports-

Tax policy:- lower marginal income tax apply siders believe that lower rate will include workers to prefer work over leissure.In regard to lower capital gain tax rates they believe that lower rate induce investors to deploy capital productivity.

2. Regulatory policy:-

supply side tend to Ally with traditional political conservatives doors who would prefer a small Government and less intervention in the pre market.this is logical because supply side as although they may acknowledge that government can temporarily help by making purchases.

3. Monetary policy:- monetary policy e Eid special controversial for supply side economy. Monetary policy refer to federal reserve ability to increase or decrease the quantity of dollars in circulation.

4. Free market supply side policy

policies to increase competitiveness and free market efficiently. Improve incentives to look for work and invest in people skills.

There are various objective of supply side economy

supply side economy promoting more competition and stimulate faster pace to invention and innovation to improve competitiveness. It provides a platform to sustained non inflationary growth. Encourage the startup and expansion of new business especially those with export potential. It prove that trend rate of growth of real GDP.