Supply-Side Economics Vs. Demand-Side Economics

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"If you build it, they will come." (Field of Dreams) Economists will probably never agree on if supply-side economics or demand side economics is actually how to economy works. However, we will always have a Monetary Policy. Supply-Side Economics believe that if they stimulated production that it would lower unemployment rates. Demand- Side Economics stimulate the consumption of goods and services in order to increase the output. The Monetary Policy is the governments way of controlling the economies money supply. Supply-Side Economics and Demand-Side Economics are different but go share a common goal.

Supply-Side economics is the belief that stimulated production would lead to increased output. Supply-Side economics was first used by President Reagan in the 1980's and it actually helped the economy. For 12 years after Reagan tried this policy, there was economic growth with a GNP growth rate of 3.2%. The Supply-Side policy cuts taxes and the governments ability to regulate, which they hope will lead to increased motivation for business and individuals. If Business invest they will expand which will create jobs. With more people working, there is more money getting saved, which means …show more content…
Demand-Side economics is based off of Keynesian economics, and is sometimes called Keynesian economics. President Roosevelt was the first to use Keynesian economics or demand-side economics. Demand -Side economics helped bring the U.S. out of the Great Depression. Demand-Side economics cuts into taxes, and increasing the federal spending, which will in return, create more jobs so people can have more money. With more money, people will buy more which means business will have to increase the output to meet the growing demand. However, both Demand-Side and Supply side economics want to increase production without increasing unemployment without any

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