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CAIE IGCSE Economics 4.4.1 Definition of supply-side policy

State the productivity or capacity aim explicitly, then contrast government-led supply reforms with central-bank monetary instruments that primarily influence aggregate demand.

Syllabus
2027–2029
Course
Economics 0455

Exam points

  • Define supply-side policy as measures intended to increase productivity or productive potential.
  • Distinguish its government-led capacity focus from central-bank monetary-policy tools.

4.4.1—Definition of supply-side policy question 1

[Maximum number: 1]

Which statement about supply-side policy is correct?

A

It aims to increase the productive potential of the economy.

B

It aims to increase total demand in the economy.

C

It involves changes in the equilibrium foreign exchange rate.

D

It involves changes in the rate of interest.

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