Supply-side policies boost long-run economic capacity

Steps:

• Recall that supply-side policies target the production side of the economy to enhance efficiency and growth.
• Identify core goals: improving productivity via incentives like tax cuts, deregulation, or education investments.
• Evaluate options against this: A focuses on jobs (demand-side), B on trade (not supply-focused), C and D both mention productivity but D is specified as correct.
• Select D as it directly matches the standard definition.

Why D is correct:

• Supply-side policy is defined in economics as measures to increase aggregate supply by raising productivity, such as through lower taxes on labor and capital to encourage output.

Why the others are wrong:

• A: Decreasing unemployment is often a demand-side goal, like fiscal stimulus, not supply-side.
• B: Increasing imports relates to trade liberalization, not domestic productivity enhancement.
• C: Identical to D, but per question, D is the designated correct choice.

Final answer: D