Answer to Question #112620 in Microeconomics for Uzzafir Raza

Question

Discuss the effectiveness of supply-side policies in increasing the supply of enterprise to the
economy?

Answer 1

Supply-side economics is the theory that says increased production drives economic growth. The factors of productions are capital, labor, entrepreneurship, and land.Supply-side fiscal policy focuses on creating a better climate for businesses through tax cuts and deregulation.Companies that benefit from these supply policies are able to hire more workers because of reduced union effects and reduced taxes. The resultant job growth creates more demand which further boosts the economy.