Supply-side policies aim to shift aggregate supply to the right and should :
- increase real GDP
- Reduce unemployment
- Also reduce inflation
Firstly we can think about some method about supply-side policies .For example :
- To improve productivity like training and education .If the productivity ( output per worker in a period of time ) is increased the potential output of the Economy will rise which means it is a Economy growth so that's lead to a increase in real GDP.
- To reduce in Job seeker allowance .This one is for reduce unemployment .Because there is a type of unemployment called "voluntary"(They are people who don't want to do a job they think the benefit is given by government is higher then the wage) So that why government should reduce the benefit to help to reduce the rate of unemployment and that's will also help us to increase our supply,because of more people are working.
- To make the national minimum wage higher ,it is the same thing as reduce the allowance I think.Because of this more people will go to work. And there still have 6 more I won't explain each one...there are
- Government assistance to a new firms
- Reduction in direct taxes
- Reduction in other benefits
- Reduction in trade union power
- Privatisation
- Deregulation
So all in all the supply-side policy can help us to reduce unemployment and increase real GDP although I haven't got an example for reduce inflation but it is a true .Because if the the AS cure shift right the price level will lower... I think these are really good policies but they are long run policies to see the result we need time ...But they can solve our real problem and dispose unemployment and inflation these two negative correlation very well.
So I think supply-side policies are really useful!
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