r1111 Posted November 2, 2013 Report Share Posted November 2, 2013 If the government invests in infrastructure is this an interventionist supply side policy instead of fiscal policy (increase in government spending)? If my article talks about infrastructure investments should I show an increase in SRAS and AD. Thank you in advance for the help. Reply Link to post Share on other sites More sharing options...
YellowSpider Posted November 2, 2013 Report Share Posted November 2, 2013 If the government invests in infrastructure is this an interventionist supply side policy instead of fiscal policy (increase in government spending)? If my article talks about infrastructure investments should I show an increase in SRAS and AD. Thank you in advance for the help. i don't see why it would be a supply side policy. government spending is part of fiscal policy so i guess you could show a 'potential' rightward shift in the AD curve. but make sure you explain nicely how spending more on infrastructure will leave consumers with more money to spend on other things and hence increase the AD.. Reply Link to post Share on other sites More sharing options...
r1111 Posted November 2, 2013 Author Report Share Posted November 2, 2013 If the government invests in infrastructure is this an interventionist supply side policy instead of fiscal policy (increase in government spending)? If my article talks about infrastructure investments should I show an increase in SRAS and AD. Thank you in advance for the help. i don't see why it would be a supply side policy. I looked it up in my textbook. investment in infrastructure is an interventionist supply side policy because good infrastructure an help reduce costs of production. for example, good roads reduce transportation costs. Reply Link to post Share on other sites More sharing options...
YellowSpider Posted November 2, 2013 Report Share Posted November 2, 2013 If the government invests in infrastructure is this an interventionist supply side policy instead of fiscal policy (increase in government spending)? If my article talks about infrastructure investments should I show an increase in SRAS and AD. Thank you in advance for the help. i don't see why it would be a supply side policy. I looked it up in my textbook. investment in infrastructure is an interventionist supply side policy because good infrastructure an help reduce costs of production. for example, good roads reduce transportation costs. oh, that makes sense. yeah i was hesitant to explain how this would lead to an increase in AD. but it's good you told me. thanks Reply Link to post Share on other sites More sharing options...
r1111 Posted November 2, 2013 Author Report Share Posted November 2, 2013 (edited) No Problem, this video clears up any confusion: http://www.econclassroom.com/?p=4447 Edited November 2, 2013 by r1111 Reply Link to post Share on other sites More sharing options...
YellowSpider Posted November 2, 2013 Report Share Posted November 2, 2013 thanks Reply Link to post Share on other sites More sharing options...
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