Supply-side economics

Supply-side economics assumes that demand-based policies will be ineffective in the long term because of rational expectations.

Supply-side economics requires measures to be deployed on the supply side of the economy rather than the demand side of the economy. According to supply-side economics, unemployment will be reduced by measures that reduce costs for producers. Costs for businesses can be lowered by reducing taxes and fees on businesses according to supply-side economics. With lower costs for producers, supply will increase, providing a larger production and a reduction in unemployment.