A supply side policy increases productive capacity, but total demand does not rise. What is most likely in the short run?
All additional capacity is necessarily used
Inflation must rise sharply
The balance of payments must move into deficit
Actual output may rise by less than productive capacity
29 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.