Supply-Side Policies Target Labor Market Efficiency

Steps:

• Recall supply-side policies improve productive capacity and flexibility to boost long-term growth and employment.
• Identify unemployment reduction via enhancing skills and employability, addressing structural issues.
• Evaluate options: A and D stimulate demand; B protects domestic markets; C builds workforce skills.
• Select C as it directly enhances labor supply through human capital investment.

Why C is correct:

• Supply-side policy defines training schemes as measures to upskill workers, reducing structural unemployment by matching skills to job demands (per economic theory on human capital).

Why the others are wrong:

• A: Increases aggregate demand via fiscal policy, not supply-side.
• B: Raises protectionism, distorting trade without improving domestic supply efficiency.
• D: Lowers borrowing costs to boost demand through monetary policy.

Final answer: C