CAIE A-Level Economics 5.4.3 Supply-side Policy Tools

CAIE A-Level Economics 5.4.3 Supply-side Policy Tools
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise selecting training, infrastructure, technology, enterprise, tax and labour-market measures for a stated supply constraint and explaining their productivity effects.

How this is tested

  • match training, infrastructure or technology support to the productivity barrier described
  • explain how business subsidies, competition or lower direct taxes can strengthen incentives
  • distinguish a supply-side effect from the same measure's fiscal or aggregate-demand effect

Question 23

[Maximum number: 1]

What is an example of a supply-side policy?

A

an import quota to restrict the supply of goods

B

a rise in interest rates to encourage the supply of savings

C

a specific tax on the supply of goods to raise revenue

D

a subsidy to businesses to promote the supply of training courses