Fiscal Policy - Impact on Aggregate Supply and Economic Growth
Fiscal policy can have important effects on the supply-side of developed and developing countries.
Labour market incentives:
- Changes in income tax can improve incentives for people to actively look for work
- Lower taxes might also have a positive effect on work effort and labour productivity
- Spending on infrastructure provides the capacity needed for other businesses to flourish.
- Lower rates of corporation tax might attract inward investment from overseas
3.Entrepreneurship and investment:
- Government spending can be used to fund an expansion in new small business start-ups
4.Research and development and innovation
- Government spending and tax allowances could be used to encourage research
- Tax incentives can be used to stimulate investment in low carbon technologies
5.Human capital of the workforce:
- Spending on education and increased investment in health and transport can also have important supply-side effects in the long run
- Government spending can help to improve human capital, employability and productivity
From bond yields to coupons; from the PRA to the FCA. The new A Level Economics specifications from Sept 2015 include more substantial coverage of financial markets. This resource-packed CPD course will help you quickly get up to speed with the new teaching content and provide you with lesson resources you can use straightaway.