Professional Documents
Culture Documents
Economic Issue Notes
Economic Issue Notes
Economic Objectives
Here, we’ll look at the different economic objectives a government might have and how their
absence/negligence will affect the economy as well as businesses.
Supply-side policies: both the fiscal and monetary policies directly affect demand, but the
policies that influence supply are very different. It can include:
Privatisation: selling government organizations to private individuals- this will
increase efficiency and productivity that increase supply as well encourage
competitors to enter and further increase supply.
Improve training and education: governments can spend more on schools, colleges
and training centres so that people in the economy can become better skilled and
knowledgeable, helping increasing productivity.
Increased competition: by acting against monopolies (firms that restrict competitors
to enter that industry/having full dominance in the market- refer xxx for more details)
and reducing government rules and regulations (often termed ‘deregulation’), the
competitive environment can be improved and thus become more productive.
For more details on government policies, check out our Economics notes.
*EXAM TIP: Remember that economic conditions and policies are all interconnected; one
change will lead to an effect which will lead to another effect and so on, like a chain reaction
in many different ways. In your exams, you should take care to explain those effects that are
relevant and appropriate to the business or economy in the question*
How might businesses react to policy changes? It will depend varying on how much impact
the policy change will have on the particular business/industry/economy. Here are a few
examples: