Question

Economics AS-level Discuss the factors that might explain why 'the UK's forecast long-term trend rate of growth was reduced'

Evaluate supply-side policies that could be used to increase the UK's rate of economic growth. DONE Evaluate the likely macroeconomic effects of the UK government pursuing a policy of reducing its budget deficit. DONE

Answer 1

Factors that might explain why the UK's forecast long-term trend rate of growth was reduced include investment in physical and human capital, technology, and catch-up growth. Supply-side policies such as promoting innovation, improving education and skills, and reducing barriers to entrepreneurship can be used to increase the UK's rate of economic growth.

Step-by-step explanation:

Factors that might explain why the UK's forecast long-term trend rate of growth was reduced include investment in physical and human capital, technology, and catch-up growth. These factors determine the speed of long-term economic growth but do not appear directly in the AD/AS diagram. To increase the UK's rate of economic growth, supply-side policies such as promoting innovation, improving education and skills, and reducing barriers to entrepreneurship can be used. These policies aim to increase productivity and efficiency in the economy.