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(Doc) Economic Growth in the UK

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Added on  2021-06-17

(Doc) Economic Growth in the UK

   Added on 2021-06-17

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ECONOMIC GROWTH IN THE UK1Name of the studentInstructorInstitutionCourseDate1
(Doc) Economic Growth in the UK_1
ECONOMIC GROWTH IN THE UK2 Supply side policies can be defined as government initiated plans whose aim is to boost productiveness and skillfulness in the economy. In doing this, the government may be seeking to achieve the following macroeconomics objectives;An increase in the national economic growthLowering the level of inflationReducing the level of unemploymentMaintaining the equilibrium on the balance of paymentsThe above objectives involve a trade off in some cases in that, for example, increasing government expenditures may contribute to an increase in economic growth and lower unemployment, but it will mean a rise in inflation.In order to realize success in all these objectives, there is need to initiate changes in the supply side of the economy. The state can achieve low inflation and improve the overall competitiveness of the economy if it is able to increase productivity and shift the aggregate supply to the right.[CITATION Lin13 \p 67 \l 1033 ]To understand better how the supply side policies could stimulate economic growth, we need to analyze its impact on each of the above government’s macroeconomic objectives.Supply side policies and the economic growth2
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ECONOMIC GROWTH IN THE UK3[CITATION Oul15\p 76 \l 1033 ]The supply side policies would increase the long run aggregate supply. It would also lead to a rise in overall demand from AD1 to AD2. This would in turn increase the economic growth fromY1 to Y2.Supply side policies will boost the rate of economic growth by improving the long-run aggregate supply. This leads to an increase in the rate of growth in the economy without causing inflation. It is impossible to increase the long-run rate of economic growth using demand side policies. This calls for effective supply side policies from the side of the government if it needs sustainable growth rate.[CITATION Coo14 \p 158 \l 1033 ]An example is where effective training schemes are established, which gives workers extra skillsand thus leading to productivity. The state should make efforts in encouraging businesses to 3
(Doc) Economic Growth in the UK_3
ECONOMIC GROWTH IN THE UK4invest in more research plus development by giving them subsidies. If it is achieved, these policies would enable the country to increase its growth rate.Practically, the government has minimum control on as far as its supply side policies are concerned, in improving the long run flow of economic growth, as this counts largely on technological advancements. These advancements are independent of government policies.[CITATION Fer14 \p 172 \l 1033 ]Supply side policies and unemployment[CITATION Rol13 \p 194 \l 1033 ]In its attempt to lower the level of unemployment, the government can employ interventionist’s supply side policies, for example, by offering better education and training. This4
(Doc) Economic Growth in the UK_4

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