IB Economics

Topic 3.4 Supply Side Policy

A Web Quest

Has a nice simple explanation of fiscal, monetary and supply side policies. Note that this is
UK biased. Read this –note the bit on supply side policy.
http://www.bized.ac.uk/virtual/bank/business/external/policy/expl.htm

This is a really useful mind-map which is a summary of the three main policies – I suggest
you print this, or at least save it for future reference. Study it now and check you are familiar
with all its labels.
http://www.bized.ac.uk/educators/16-19/economics/macro/presentation/policiesmap.gif

Summary of supply side policy concentrating on increasing the productivity of firms. Read
this through and make appropriate notes. NOTE: UK bias!
http://www.tutor2u.net/economics/content/topics/supplyside/product_markets.htm

Summary of supply side policy concentrating on increasing the quantity and quality of
labour. Read this through and make appropriate notes. NOTE: UK bias!
http://www.tutor2u.net/economics/content/topics/supplyside/labour_policies.htm

Interactive quiz to check the difference between fiscal, monetary and supply side policy. Do
the quiz, check it, amend the answers, print the sheets.

http://www.bized.ac.uk/virtual/bank/business/external/policy/quiz.htm

Printable worksheet to check your overall understanding of supply-side policy.

http://www.bized.ac.uk/virtual/bank/business/external/policy/worksheet3.htm

Case-studies:

1) India
Skim-read this article and briefly summarise how the author perceives India has recently been
successful with supply-side policy. What has the policy concentrated on? Give one fact to
show its success. Be sure to skim read to the bottom.
http://www.blonnet.com/2005/08/23/stories/2005082300271000.htm

2) USA
Ronald Reagan’s government relied heavily on supply-side macroeconomics in the US of A in
the 1980s. (It is quite interesting to note that governments that concentrate on demand-side
policy tend to have a very different political outlook than those that concentrate on supply-side
policy). Run a Google search to find out a little about the Reagan government’s supply-side
approach. How did it work? What were its advantages? What were its criticisms? Was it
successful? Summarise your findings. Be very aware that the web sites you read are likely to
be biased by political views and opinions. (Ask me if in doubt about this).