5.4 Supply-side policy

In this chapter you will learn how to:

• define the meaning of supply-side policy in terms of its effects on LRAS curves
• explain the objectives of supply-side policy (to increase productivity and productive capacity)
• analyse the tools of supply-side policy, including training, infrastructure development and support for technological improvement
• discuss, using AD/AS analysis, the impact of supply-side policy on the equilibrium national income, the level of real output, the price level and employment.