A supply side reform raises productive capacity, but firms expect weak sales and do not expand output. Which conclusion is most accurate?
The reform must have reduced productivity
Weak demand proves supply side policy is monetary policy
Inflation must rise because capacity increased
The policy may improve long-run potential, while having a limited short-run effect on actual growth and employment
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.