Supply-side policies

Supply-side policies

We have already looked at demand-side policies, but governments also have the option to use supply-side policies.  These are policies that are designed to increase the productive capacity of a country.  As with demand-side policies there are two types: Interventionist policies and Market-based policies.  It is important not just to understand the difference between these, …

Monetary policy

Monetary policy

We have already looked at one aspect of demand-side policy, fiscal policy, and it is important that we also understand the other type, monetary policy.  Monetary policy is the use of the interest rate, and money supply, in order to affect the level of aggregate demand in an economy.  We also need to appreciate that …

Fiscal policy

Fiscal policy

We have now looked at the 5 different macroeconomic objectives of governments (low and stable inflation, low unemployment, stable economic growth, promoting equity and a favourable balance of payments), and the next step is to look at the government policies available to try and meet these objectives.  The types of policies can be split into …

Economic growth

Economic growth

One of the government macroeconomic objectives we have already mentioned is stable economic growth.  We have already looked at the business cycle and touched on issues relating to economic growth, but it is important that you understand what causes economic growth and the impacts (both positive and negative) that it can have.

Economic growth

Economic growth

Economic growth is one of the areas we study in relation to government macroeconomic objectives.  It is important to be able to distinguish between both actual and potential economic growth; not only through definitions but also with diagrams.  It it possible to show the difference first using a PPC  diagram, with a movement of the …