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Supply-side vs Demand-side Economics
Transcript of Supply-side vs Demand-side Economics
What do they both have in common?
Definition: economic policies designed to increase aggregate supply or shift the aggregate supply curve to the right.
Supply-side economics is part of macroeconomics that focuses on the incentive of economic growth by supporting greater production of goods and services; making it grow big. This essentially means that it removes the issue of demand from the economic burden.
Definition: economic theory that advocates use of the government spending and growth in the money supply to stimulate the demand for goods and services and therefore expand economic activity.
Demand-side is a theory in economics that suggests the economic stimulation comes best from increasing the demand for goods and services; make it grow big.
Compare and Contrast
Supply-side and Demand-side economics are both a theory in economics that promote growth. Demand-side deals with consumers while Supply-side deals with suppliers. One is not better than the other. They are used best when there is a mix of both.