• Expand Economic Capacity & Growth

  • Think of the economy as a giant cake. Supply-side policies help to bake a bigger cake, so there's more to go around!
  • Real-world example: More factories = more goods, like having more pizza shops in town!

• Increase Competition in Markets

  • Competition is like a sports game, the more teams, the more exciting it gets. With more businesses competing, prices drop and efficiency grows.
  • Real-world example: Think of different smartphone brands like Apple and Samsung trying to outdo each other!

• Reduce Labour Costs

  • If you can hire a superhero team at a lower price, you'd do it! Lower costs mean more jobs and better company profits.
  • Real-world example: Imagine if a restaurant could hire more chefs and waitstaff without spending too much. More delicious food for everyone!

• Encourage Investment in Innovation

  • Want businesses to build cool new gadgets or find cleaner energy sources? That's what this goal is all about!
  • Real-world example: Electric cars like Tesla wouldn't be possible without investments in new technologies.

• Reduce Inflation Risk

  • No one likes skyrocketing prices. Supply-side policies keep prices steady, helping local companies to compete globally.
  • Real-world example: Think of inflation as a balloon. You don't want it to get too big and burst!

Product Market Related Policies

• Anti-Monopoly Regulation
  • Monopolies are like giant, lone dragons controlling the market. Governments want to slay these dragons by promoting competition.
  • Real-world example: EU blocking a merger between Siemens & Alstom to prevent a railway monopoly.
• Deregulation
  • Imagine tearing down unnecessary walls in a maze. That's deregulation. It makes things easier for businesses.
  • Real-world example: Greece's deregulation of the trucking industry to decrease transportation costs.
• Privatization
  • Like turning a school play into a blockbuster movie, governments sell state-owned assets to private owners for efficiency.
  • Real-world example: British Airways was once government-owned; now it's private!
• Trade Liberalization
  • Imagine a world where superheroes from different countries team up! Trade liberalization lets businesses globally join forces.
  • Real-world example: NAFTA, which increased trade between the U.S., Canada, and Mexico.

• Reducing Unions' Power
  • Unions are like powerful wizards. Sometimes, their might can lead to higher costs. Reducing their power can help companies grow.
• Minimum Wage Adjustments
  • Too high a minimum wage is like putting a speed bump on a racetrack. Lowering it can boost employment but may affect worker welfare.
• Reducing Non-Wage Costs & Unemployment Benefits
  • Think of these as trimming the fat from a meal. It makes hiring and working more appealing but must be balanced.
  • Real-world example: Scandinavian countries balance worker benefits with business needs.