USA HISTORY

Detailed explanation-1: -Supply side constraints, which are now being referred to as a major problem, simply mean that production in the economy is unable to keep pace with rising demand due to a variety of factors such as inadequate infrastructure, lack of credit, availability of labour and availability of technology.

Detailed explanation-2: -The core point of supply-side economics is that production (i.e. the “supply” of goods and services) is the most important in determining economic growth. Keynesian economics, or demand-side economics, believes that the level of demand in the economy is the key driving factor to economic growth, rather than supply.

Detailed explanation-3: -In supply-side economics, the goal is to provide consumers with more products and service options to purchase by encouraging businesses to spend money on production and research. In contrast, demand-side economics focuses on helping consumers maximize their income by reducing taxes to spend more on goods and services.

Detailed explanation-4: -Supply-side fiscal policy uses privatisation, deregulation, tax cuts, and free trade agreements to increase aggregate supply and economic efficiency. An example of supply-side fiscal policy is a cut in income tax. The tax cut will motivate workers to work longer because they can earn more with lower taxes.