ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The supply-side theory is a macroeconomic theory that stresses the importance of increasing production through corporate tax cuts, deregulation, and low capital borrowing rates, to boost economic growth.

Detailed explanation-2: -Supply-side economics is based on the idea that the supply of goods drives the economy. Whereas Keynesian economics tries to encourage economic growth by increasing aggregate demand, supply-side economics relies on increasing aggregate supply. It does this by focusing on taxes.

Detailed explanation-3: -Keynesian economics focus on demand-side solutions to recessionary periods. The intervention of government in economic processes is an important part of the Keynesian arsenal for battling unemployment, underemployment, and low economic demand.

Detailed explanation-4: -Fiscal policy is largely based on ideas from British economist John Maynard Keynes. Keynes argued that governments could stabilize the business cycle and regulate economic output rather than let markets right themselves alone.

Detailed explanation-5: -The followers of Keynes believed that fiscal policy can be a powerful lever to move the economy because the effect of an increase in spending or a cut in taxes would be multiplied by stimulating additional demand for consumption goods by households.