A summary of the theory of supply school

This school believes that the growth of production depends on the supply and effective utilization of production factors such as labor and capital. Individuals and enterprises provide factors of production and engage in business activities in order to seek remuneration, and the stimulation of remuneration can affect people's economic behavior. The free market will automatically regulate the supply and utilization of production factors, and the factors that hinder market regulation should be eliminated. Laffer, one of the main representatives of this school, explained supply economics as: "Providing an analytical structure based on personal and corporate stimulation. People use stimuli to change behavior, are attracted by positive stimuli, and avoid negative stimuli. The task of the government in this structure is to use its functions to change stimuli to influence social behavior. "