A government aims to increase the trend rate of long-run economic growth by implementing a supply-side policy. Which one of the following is a policy designed to stimulate the supply side of the economy?
A reduction in the central bank's policy interest rate to encourage consumer borrowing
An increase in the level of housing benefits paid to low-income tenants
Tax incentives for businesses to invest in research and development (R&D)
A temporary reduction in the standard rate of value-added tax (VAT) to encourage consumer spending
245 exam-style questions on AQA A Level Economics 2.5 Fiscal policy and supply-side policies, covering 2.5.1 Fiscal policy and 2.5.2 Supply-side policies. Each one has a worked solution and a mark scheme showing where the marks go.