Supply Side Policies

    Supply Side Policies: These are government policies to encourage the economy to increase its potential growth rate.

   Factors affecting Supply Side policies:

·         Education: A more educated workforce will mean that there is a larger labour pool and hence greater labour productivity. There is lot more encouragement for education and training e.g. EMA and NVQ’s.

·         Competition: This leads to higher output levels and lower prices because of the pressure between businesses to retain customers. Markets have been deregulated. Deregulation means new businesses enter the market to create competition for greater quality.

·         Labour market policies: Decreasing direct taxes gives people more incentive to re-join workforce. Trade Unions work towards reducing unemployment and giving greater wages.