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Long questions


Question 1

(a) Distinguish between market based and interventionist supply-side policies.

(b) Using specific examples and diagrams where appropriate, analyse the costs and benefits to the economy of the government implementing a market based approach to supply-side policy.

Question 2

(a) Explain why the shape of the aggregate supply curve may differ in the short and long run.

(b) Evaluate the extent to which supply-side policy attempts is effective in influencing output, employment and income in the long run.