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Supply side policy

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Question 10

The diagram shows an outward shift in a country's Long-Run Aggregate Supply curve from LRAS1 LRAS_1\,LRAS1​ to LRAS2LRAS_2LRAS2​, representing an increase in the economy's potential output.

AD-AS Shift

Which of the following policy measures is least likely to achieve this outward shift?

Lowering the rate of corporation tax on retained profits reinvested in advanced robotics and automation.

Launching a state-funded apprenticeship scheme in high-demand digital sector skills to reduce structural unemployment.

Implementing a temporary reduction in the standard rate of Value Added Tax (VAT) to encourage households to pull forward durable goods purchases.

Reducing regulatory barriers and occupational licensing requirements to encourage greater labor mobility across regions.

Supply side policy Questions

  1. A Level
  2. /Economics
  3. /Supply side policy