Goals of Supply-Side Policies

Supply-side policies are government actions done to increase the aggregate supply of the economy, by improving the quality and quantity of factors of production.

1. Achieve long-term growth by increasing productive capacity

2. Improve competition and efficiency

3. Reduce labor costs and unemployment through labor market flexibility

4. Reduce inflation to improve international competitiveness

5. Increase firms' incentives to invest in innovation by reducing costs

These are all meant to shift the economy's LRAS/PPC to the right.