An economy is experiencing sluggish productivity growth and a stagnant rate of potential output. The government decides to implement a suite of market-based supply-side policies specifically targeted at improving labor market flexibility and work incentives to shift the Long-Run Aggregate Supply ( $L R A S$ ) curve to the right.

Which of the following policy combinations is most consistent with this strategy?

Reducing marginal income tax rates and reducing welfare benefit entitlements.

Expanding government-funded vocational training schemes and increasing the statutory national minimum wage.

Providing state subsidies to green-energy start-ups and investing in regional high-speed rail networks.

Abolishing zero-hours contracts and increasing public sector salaries to attract higher-skilled administrative workers.

Which of the following policy combinations is most consistent with this strategy?

Reducing marginal income tax rates and reducing welfare benefit entitlements.

Expanding government-funded vocational training schemes and increasing the statutory national minimum wage.

Providing state subsidies to green-energy start-ups and investing in regional high-speed rail networks.

Abolishing zero-hours contracts and increasing public sector salaries to attract higher-skilled administrative workers.

2.5 Fiscal policy and supply-side policies

Question 58

Markscheme

2.5 Fiscal policy and supply-side policies

Question 58

Markscheme

2.5 Fiscal policy and supply-side policies

Question 58

2.5 Fiscal policy and supply-side policies Questions

2.5 Fiscal policy and supply-side policies

Question 58

2.5 Fiscal policy and supply-side policies Questions