Key terms to revise:

• Aggregate supply: Total planned output of goods and services at a given time and price level.
• Deregulation: Reducing barriers to entry to make the supply-side of an industry more competitive
• Free-market policies: Policies to increase competitiveness and competition such as deregulation
• Hysteresis: When a sustained period of low aggregate demand can cause permanent damage to the supply side
• Income tax cuts: Lowering direct taxes to improve work incentives and productivity
• Infrastructure: Capital investment in telecoms, rail, ports, roads, energy and other utilities
• Interventionist policies: Involve interventions to overcome market failure(s) that might limit a country's supply-side potential
• Labour market flexibility: Market for human resources characterised by short term employment contracts and unpredictable earnings
• Labour productivity: A measure of efficiency e.g. output per hour worked
• Long run aggregate supply (LRAS): Productive potential determined by state of technology, productivity, factor mobility and incentives
• Privatisation: Involves selling state-owned assets to the private sector e.g. the Royal Mail in 2013
• Shocks: Unexpected events that can affect both aggregate demand and supply
• Trade liberalisation: Lowering import tariffs and eliminating quotas to increase competition in markets
• Zero hours contracts: Workers employed without any guarantee about the amount of work they will have