Supply-side policies target long-term economic efficiency

Steps:

• Define supply-side policies as measures to boost productivity, like education and deregulation, shifting aggregate supply rightward.
• Assess impact on unemployment: they reduce structural and regional types by improving skills and mobility.
• Evaluate options against economic theory: demand-deficient needs fiscal/monetary stimulus, not supply measures.
• Confirm D aligns with policies addressing regional disparities via targeted training.

Why D is correct:

• Supply-side policies, per economic theory, enhance labor mobility and skills in specific areas, directly reducing regional unemployment caused by geographic mismatches.

Why the others are wrong:

• A: Demand-deficient unemployment requires demand-side policies to boost aggregate demand, not supply-side shifts.
• B: All policies involve opportunity costs, as resources allocated to supply measures (e.g., training) divert from other uses.
• C: Rightward aggregate supply shift lowers both unemployment and price levels, contradicting the claim.

Final answer: D