What are some of the policy tool used by supply-side economists and who do they work?

Answer 1

Supply-side economics gives benefits to the supplier. Usually this means factories and businesses. In other words, the government would give tax cuts to businesses.

This economic theory is based on the presumption that lower costs for businesses will increase the overall economy by providing more jobs to more people, thereby increasing demand and GDP. By cutting taxes for the rich, more people get to work. When more people work, the overall population makes more money. When that happens, the entire economy grows, and everyone prospers.

Demand-side economics gives benefits to the demander. This is the consumer, the typical person who doesn't produce very much, but spends time working at a job. By giving taxes or benefits to the common man, that person will have more money to spend. This does increase profits for businesses in the short term. But, because the costs of production are the same, due to the taxes being the same for the business, the business is required to re-invest those profits in expansion, which takes time.

In short, supply side economics is preferred as it is faster to hire more people at the same store than it is to build and open more stores.