Supply-Side Theory

AAA

DEFINITION of 'Supply-Side Theory'

An economic theory holding that bolstering an economy's ability to supply more goods is the most effective way to stimulate economic growth.

INVESTOPEDIA EXPLAINS 'Supply-Side Theory'

Supply-side theorists advocate income tax reduction because it increases private investment in corporations, facilities, and equipment.

RELATED TERMS
  1. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital ...
  2. Milton Friedman

    An American economist and statistician best known for his strong ...
  3. Quantity Supplied

    A term used in economics to describe the amount of goods or services ...
  4. Supply Chain

    The network created amongst different companies producing, handling ...
  5. ISLM Model

    A macroeconomic model that graphically represents two intersecting ...
  6. Recession

    A significant decline in activity across the economy, lasting ...
Related Articles
  1. Economics

    Economics Basics

    Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!
  2. Taxes

    How Your Tax Rate Is Determined

    Feel like the government always has its hand in your pocket? Learn the theory behind how it decides how much to take.
  3. There are many ways to rank the word's most powerful companies. Looking at market value, brand value or sales revenue are all methods used to rank the biggest companies in the world.
    Economics

    Most Powerful And Influential Public Companies In 3 Metrics

    There are many ways to rank the word's most powerful companies. Looking at market value, brand value or sales revenue are all methods used to rank the biggest companies in the world.
  4. A look at China's plan to control population growth and how it could change going forward.
    Economics

    China's One-Child Policy Explained

    A look at China's plan to control population growth and how it could change going forward.
  5. With the second-largest economy in the world, China has significant (and growing) influence on the global economy. But how is that impact figured?
    Economics

    A Look At China's Growing Influence On The World

    With the second-largest economy in the world, China has significant (and growing) influence on the global economy. But how is that impact figured?
  6. Quantitative easing in Europe is coming, but too slowly to avert a severe slowdown and perhaps even a hard landing.
    Economics

    How Is Europe Affecting The Martkets?

    Quantitative easing in Europe is coming, but too slowly to avert a severe slowdown and perhaps even a hard landing.
  7. If you're considering investing in China and want to know when to buy, sell, hold or stay away, consider these economic indicators.
    Economics

    Eyeing China? Consider These Economic Indicators

    If you're considering investing in China and want to know when to buy, sell, hold or stay away, consider these economic indicators.
  8. Bonds & Fixed Income

    What methods can the government use to control inflation?

    Find out what inflation is, what a government can do to control it, and how the results of those actions help or hurt the economy overall.
  9. Personal Finance

    What's the difference between hyperinflation and inflation?

    Learn the difference between inflation, which can be a normal part of economic fluctuation, and potentially economy-killing hyperinflation.
  10. Economics

    How A Limited Government Affects A Country's Finances

    Countries with limited governments have fewer laws about what individuals and businesses can and can’t do. What's the net result?

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center