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Discuss the effectiveness of supply side economics in improving the performance of the UK economy. Supply side economics is very effective on a long run basis, but may not be as good on a short run

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Introduction

ECONOMICS HOMEWORK Discuss the effectiveness of supply side economics in improving the performance of the UK economy. Supply side economics is very effective on a long run basis, but may not be as good on a short run. This means to improve the economy through competition between firms and markets, to increase efficiency and flexibility through labour and production and also to improve all macro tradeoffs. The effect all this will have on the AS curve is that the AS curve will shift to the right, showing that supply increases and inflation decreases. Also now more jobs will be available which means that the unemployment level will decrease. Supply side economics can do a lot good for the future generations, in a long run, but it may cause problems in a short run. ...read more.

Middle

Also this means that people who don't have many skills other then mining or working in steelworks etc may not be able to get a job anywhere else unless they are taught new skills. Problems like this can also be good for the economy as the old industries or ones who can't cope with the competition could relocate to the new industry will open up more jobs for people. Also the new industries will require different skills or more skills so people will become productively more efficient at their work, which will allow faster economic growth for the UK. Competition can also pump up demand as well, which means that this can also benefit the demand side of economics as well as the supply side. ...read more.

Conclusion

and actually start working and also pay would need to increase so that it encourages more people to work rather than get benefits. If the wages for people is lower than the benefits people get for not working, then people would definitely take the easy way out. If benefits are cut and wages are increased then people will have no choice but to work and earn their money which will increase economic growth and in a long run UK will have better trade offs, because of their good productivity and efficiency inflation will be low which means prices will also be low. This means that the UK will be able to export and import more, but exports will be better as this will mean there is more revenue coming in. ?? ?? ?? ?? ...read more.

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Response to the question

This essay jumps in a bit quickly to the question. I would've liked to have seen an introduction discussing what UK performance means in macroeconomic terms: inflation rate, unemployment rate, growth. There is no discussion of what a supply side ...

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Response to the question

This essay jumps in a bit quickly to the question. I would've liked to have seen an introduction discussing what UK performance means in macroeconomic terms: inflation rate, unemployment rate, growth. There is no discussion of what a supply side policy is, or how they work. This means that this essay is short in analysis but has plenty of evaluation. I would note that in an exam, it clearly states that evaluation cannot be awarded if there is no analysis, and so this essay would score poorly.

Level of analysis

The essay has poor analysis but good evaluation. It needed to include an explanation of one supply side policy. This could've been increased investment in education and training, which increases the levels of skills of the labour force after education, thus increasing productivity. I would've then shown this on an aggregate demand and aggregate supply diagram as a shift right of aggregate supply. This then allows a discussion of the effect on real GDP and the price level, leading to an explanation of how it affects employment. Unfortunately, this mechanism is not explored in this essay! I liked how this essay shows clear awareness that supply side policies are poor in the short-term. However, this essay lacks a discussion of the effectiveness. A simple sentence stating "in the short-term supply-side policies aren't effective" would have gained marks. I would've liked to have seen some more sophisticated discussion such as "the effectiveness depends upon how targeted the investment in education and training is". Without any diagrams, it is difficult to hone in on good analysis and so this essay sometimes goes off focus.

Quality of writing

The essay has a poor structure as it goes straight into evaluation. There needs to be a progression from knowledge and understanding, to analysis and then evaluation. There is no clear conclusion in regards to answering the question of how effective supply side policies are. Sometimes the language used is colloquial such as "this is really bad for the economy". I would've liked to have seen more technical terms used, and this is mostly due to the lack of analysis. Spelling, punctuation and grammar are fine.


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Reviewed by groat 26/02/2012

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