3.7.4—Demand-side and supply-side interactions Topic Practice
3.7.4—Demand-side and supply-side interactions Topic Practice
Students practise explaining how interventionist supply-side policies—like public investment—generate both immediate demand-side stimulus and long-run supply-side capacity gains.
How this is tested
- explain dual effects by showing AD shift right and LRAS shift right from government education spending
- link fiscal investment in infrastructure to simultaneous rise in aggregate demand and aggregate supply