Interventionist policy
Definition. An interventionist policy is a supply-side approach in which the government actively directs resources to raise an economy productive capacity, for example by funding education and training, subsidising research and development, or investing in infrastructure. It corrects market shortcomings that would otherwise leave productivity below its potential.
Interventionist supply-side measures contrast with market-oriented ones that rely on competition and deregulation. They aim to shift long run aggregate supply rightward, but they require government spending and can take many years to show results.
This term belongs to Supply Side Policies in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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