Introduction to Supply-side Policies

This lesson will introduce some of the market-oriented and interventionist supply-side macroeconomic policies a government may implement to promote the accomplishment of objectives such as full employment, economic growth and price level stability.
Supply side policies contrast with demand-side fiscal and monetary policies, which are aimed at stimulating or contracting the level of spending in an economy. Supply-side policies, on the other hand, are meant to stimulate production among the nation's firms by either reducing the costs faced by firms through deregulation and labor market reforms or by improving the productivity of the human and physical capital available to producers. If successful, supply-side policies will stimulate job creation and economic growth, allowing output and employment to increase while maintaining a stable price level in the economy.
Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! econclassroom.com/?page_id=5870

[@KritiChitturi]

YOU ARE HONESTLY THE GOD OF IB ECO

[@Fran-wr2jv]

Intro should be: One step a time with Jason Welker I will pass

[@JasonWelker]

I agree with you. If you can effectively use different models to analyze the effects of different macroeconomic policies, you will only be rewarded for this, not punished (or downgraded). I think the best model to use is the one I use in my macro videos, which reflects both the Keynesian and the neo-Classical views of AS.

[@JasonWelker]

Much of a nation's infrastructure can be classified as "public goods", meaning that once it has been provided, it is difficult to charge for its use due to that it is non-excludable. An example is a road between two cities. Not many private firms would undertake a massive investment to build a road that anyone could use for free. Of course, we do have some toll roads, but unless tolls are exorbitantly high, the private firm will be unlikely to earn a profit from building the road.

[@cristoballs]

Is there a reason why infrastructure investments could not, or rather should not be privatized?

[@ITogoPogoB]

(I also have the exams in a few days) What do you mean? Do you mean they'll take off marks if we switch between the two models within a question? :S I think if you're use both models but with the purpose of indicating its differences then it'll be an effective evaluation.

[@hamishkhafaji4920]

Thanks Buddy!

[@tphillipoff]

Wouldn't the interventionist supply-side policies be considered fiscal policy? Is there overlap?

[@kyrileontiou7098]

some of them yes. for example reducing taxes can be an expansionary fiscal policy & supply side policies. so it may pontially have an effect on both the AD & AS

[@deepak_chahal_w]

It's imaging sir

[@Spaceomatic]

Wouldn't privatising an educational system make it too costly for a lowerclass to afford it, forcing them to settle for a poorer quality education? And wouldn't it in-turn negatively affect a future economy because of the lack of properly educated citizens? I'm not too attuned to economics but this is what I have observed through some research of my own. Correct me if I'm wrong.

[@adigupta6989]

it would be harder to afford thats true but the quality can be argued. A lot of asian countries provide private education better simply due to the abundance of funds and the quality they can provide. the government cannot spend as much as the private sector does because the government has to spend on other resources as well whereas privatized education solely focuses on education.