Supply-side policies

Pros
May be targeted at particular
sections of the economy reaise
efficiency
Successful application can shift out
LRAS increase growth reduce
PL
Can achieve:
o Increased production potential of
economy d
o Lower prices
o Increase level of real output
lower UnE
o Improved efficiency
o Increased competitiveness for
firms to improve BOP
Policies that cut tax rate increase
incentive to work as income &
employment increase more tax
rev.

Cons
Edu & training
o Expenditure may be insufficient
to guarantee permanent jobs
without ensuring adequate level
of AD
o Needs to be accompanied by
appropriate fiscal / monetary