Supply-side policies enhance productive capacity

Steps:

• Define supply-side policies as measures increasing aggregate supply through productivity, skills, or cost reductions.
• Eliminate demand-side options that boost spending or money circulation.
• Identify options improving labor or production efficiency as supply-side.
• Select the one directly targeting workforce skills for growth.

Why D is correct:

• Retraining workers builds human capital, shifting the aggregate supply curve rightward per economic growth models.

Why the others are wrong:

• A stimulates demand via expansionary monetary policy.
• B encourages borrowing and spending, a demand-side tool.
• C primarily boosts consumer purchasing power, affecting aggregate demand.

Final answer: D