Question

the aggregate demand - aggregate supply model can be used to illustrate that by choosing the right combination of measures )politics) it is possible for the economy to grow without it experiencing inflationary pressures. discuss four supply measures that policy makers can implement to expand the economy without increasing the inflationary pressure in the country.

Answer 1

Supply Measure Factor such as

1.Labour, (Wages),

2.Capital,

3.Entrepreneurship or Organisation,

4.Land,

Supply Measure Factor Can increase inflationary pressure in country if a policy makers Not deal with these Supply Measure Factor

That's why policy maker always implement Supply Measure Factor for expand economy without increasing the inflationary pressure

If supply of labour not fulfil as per demand then wages Cost increase, which decrease, Economy and can push inflation pressure because of increase in unit which cost of labour.,

Simply Supply decrease then wages cost increase and Economy also decrease but Inflationary Pressure of price is increasing.

Same as Land, Price increase because of low supply of land availability in market it effect on Economy and inflationary pressure increases, that's why always policy maker implement supply measure for expand economy without increasing the inflationary pressure in the country.

Simply policy makers always maintain supply majors factors to avoid inflationary pressure increase.,

Discuss about any organisation or entrepreneurship there is also a raw material price increase because of low supply of supply images then inflationary pressure of price increases and economy decrease slightly.,

In simple language inflationary pressure always stand opposite side of Economy and supply measures.

For example -

If any country price of foods commodities and goods and services rise or increase cause of low supply and high demand, then it directly impact on Economy, and price rises called Inflation, and pressure of rise price called Inflationary Pressure of country,

That's why policy maker always try to maintain demand and supply balance to avoid impact or decrease in economy and also avoid inflationary pressure increase.