Supply Side Economics Will Benefit the Economy Essay examples

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Supply-Side economics and policies would best benefit the economy in the case of a recession next year.

Supply-side policies are made of several important points to regulate the economy. Supply-side policies consist of stimulating the economy by production, cutting taxes, and limiting government regulations to increase incentives for businesses and individuals. Businesses then would invest more and expand to create jobs for people who would save and spend more money. Thus, increased investment and productivity would lead to increased output in the economy. With this increased output the economy grows and unemployment goes down. Yet, this would not be the only policy to bring the economy out of a recession.

A monetary policy must be
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Along with moral suasion, persuasion to get consumers to buy, and open market operations, the buying and selling of government securities in financial markets, the easy money policy can only help supply-side economics in it's route to ending a recession and gaining economic stability. All of these policies combined, supply-side, easy money policy, open market operation, and moral persuasion, can all have an impact on important issues. Some of these issues are employment, international trade, and inflation.

Employment may be greatly effected by a huge surge in supply that would cause businesses to hire more workers to meet the need of this great surge in supply and production. This surge in new employment would then put money in the pockets of consumers to buy products and create a demand. International trade can be greatly affected by supply-side policies. Businesses are more likely to export their goods if the economy is good and they have the resources to do so. Also businesses may import resources to produce their goods or services.

This in the long run could benefit other countries tremendously. It is even possible to cause the same effects of the supply-side policies in the US to occur in the other countries, like an increase in employment. Unfortunately, there are limitations on supply-side policies. In the case of the Laffer Curve for the years 1981 through 1989, total tax collections when adjusted for inflation, actually declined after 1981 tax