A reform of employment law makes it easier for workers to move between jobs and industries. The reform raises the economy's productive capacity, but total spending remains unchanged.
What is most likely to help actual output move towards the new level of productive capacity in the short run?
Raise productive capacity through another supply-side policy.
Reduce total spending to limit firms' need for workers.
Increase total spending through a demand-side policy.
Keep total spending unchanged while firms adjust production.
121 exam-style questions on OCR GCSE Economics 3.7 Supply side policies, covering 3.7.1 What are supply side policies and 3.7.2 Costs and benefits of supply side policies. Each one has a worked solution and a mark scheme showing where the marks go.