Supply-side policies are government measures designed to improve long-term economic growth by increasing aggregate supply. These policies focus on factors such as reducing taxes on businesses, promoting investment in physical and human capital, deregulation, and fostering innovation.
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Laffer Curve: Refers to the graphical representation of the relationship between tax rates and tax revenue. It suggests that at a certain point, increasing tax rates may lead to a decrease in revenue due to disincentives for work and investment.
Deregulation: Refers to the removal or reduction of government regulations on businesses with the aim of promoting competition and efficiency.
Tax Incentives: Refers to special deductions, exemptions, or credits provided by governments as incentives for specific economic activities or behaviors.