Governments often implement supply-side policies to improve a country’s economic performance. Evaluate the effectiveness of different supply-side policies a government could use to improve a country’s economic performance.

Mark scheme

Marking points from the official mark scheme. The mark or mark type is shown in brackets.

1. Knowledge 2, Application 3, Analysis 3, Evaluation 2
2. Knowledge: 2 marks for identification of relevant supply-side policies (e.g. education/training / infrastructure / deregulation / privatisation / tax cuts / labour market reforms)
3. Application: 3 marks for applying relevant concepts to specific policies (e.g. education improves human capital, infrastructure reduces costs, deregulation encourages competition, tax cuts incentivise investment)
4. Analysis: 3 marks for explaining how each policy improves economic performance (e.g. increases productivity / reduces costs / increases potential output / shifts LRAS right / reduces inflation / creates jobs)
5. Evaluation: 2 marks for judging the effectiveness of supply-side policies (e.g. time lags, cost, political implications, impact on income inequality, effectiveness varies by policy and context)