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Liberals and Conservative:
As opposed to liberalism conservatism is the belief in established institutions to balance things out therefore conservatives would want a strong central government. A manner of strengthening the government is by giving them more control over the money supply therefore they would prefer the Fiscal Policy. Liberals generally believe that the government should be weak and that things will balance itself out as people adjust to supply and demand automatically. They would therefore prefer the monetary policy.
Deficit:
The best way to finance the deficit spending is to use a combination of monetary and fiscal policy. To get more money increase taxes, slow down government spending, try to keep interest rates balanced and slowly build.
Surplus:
If there is a surplus and the economy is doing well it should either be put into eliminating the debt or back into the economy to try to gamble more production. If given to the people that will spend it (lower class) it will be moved around in the cycle and stimulate growth. Interest rates are balanced as best as possible by combining the monetary policy to minimize the effect of crowding out.
Supply-Side Policies:
Increasing aggregate supply by providing education, training, and or jobs. By improving unions, putting money in education, privatisation(encourage better services to the people such as lower costs, and innovation), deregulation(encourage competition in usually protected fields such as health care and education to lower costs), open trade, create subsidies, encourage entrepreneurs, lowering income tax, increase minimum wage and welfare to work, the supply of labor can drastically increase. Lowering income tax may be paradoxical but the fact is that people get to keep a higher amount of money they earn and therefore can be more satisfied with their jobs which can reduce "voluntary unemployment". Any increase in technology that may be brought about by supply-side investments can bring back a phenomenal rate of return as can be seen in the industrial revolution. Efficiency is improved saving an underestimated amount of time and international competitiveness is improved(if successfully implemented). The problem with supply-side policy is that it is expensive and it works only in the long term with no garauntees so there won't be any immediate initial rewards from the investment causing less interest in the policy. The general population is not patient enough to encourage such actions if it means that have to pay more(increase education spending, our children need it...but but, don't mess with my income tax). The goal of Supply-side economics is to shift AS right. Supply-side economics was coined in 1976 and put into practice in 1979 in the UK. The government is the one to implement this type of policy. -> This shows the movement in the AS curve allowing for more growth without inflation and therefore higher Real GDP possibilities and full employment.
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