THE RISE OF POLITICAL CONSERVATISM 1980 1992
PRESIDENT RONALD REAGANS FOREIGN POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Increase taxes to eliminate the federal deficit; regulate multinational corporations.
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Cut taxes for the wealthy; deregulate industry.
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Regulate the federal minimum wage; invest in clean energy.
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Economic growth begins at the bottom with the poor.
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Detailed explanation-1: -Based on the principles of supply-side economics and the trickle-down theory, Reaganomics proposed that decreases in taxes, especially for corporations, stimulate economic growth. If the expenses of corporations are reduced, the savings then “trickle down” to the rest of the economy, spurring overall growth.
Detailed explanation-2: -The three pillars of supply-side economics are tax policy, regulatory policy, and monetary policy. The core point of supply-side economics is that production (i.e. the “supply” of goods and services) is the most important in determining economic growth.
Detailed explanation-3: -Milton Friedman stated, “Reaganomics had four simple principles: Lower marginal tax rates, less regulation, restrained government spending, noninflationary monetary policy. Though Reagan did not achieve all of his goals, he made good progress."
Detailed explanation-4: -The administration of Republican president Ronald Reagan promoted its fiscal policies as being based on supply-side economics. Reagan made supply-side economics a household phrase and promised an across-the-board reduction in income tax rates and an even larger reduction in capital gains tax rates.