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Why can supply-side policy increase economic growth without causing as much inflation as demand-side policy?
A
They initially benefit business owners or high-income groups, potentially widening income differences.
B
- Supply-side policy increases the economy’s productive capacity.
- Extra output need not compete for a fixed amount of capacity.
C
Privatisation can leave a service controlled by very few firms, which may influence prices.
D
Demand-side policy raises spending against fixed capacity, whereas supply-side policy raises capacity itself.
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3.7.2 Costs and benefits of supply side policies Flashcards
21 flashcards on OCR GCSE Economics 3.7.2 Costs and benefits of supply side policies: the key terms, formulae and calculations you need to recall for Component 01 and Component 02.