USA HISTORY

Detailed explanation-1: -The pillars of Reagan’s economic policy included increasing defense spending, balancing the federal budget and slowing the growth of government spending, reducing the federal income tax and capital gains tax, reducing government regulation, and tightening the money supply in order to reduce inflation.

Detailed explanation-2: -The US experienced mixed consequences. On the one hand, the real GDP improved by 26% (above 1980 figures), from 13.5%, inflation was brought down to 4.1%, and unemployment dropped from 7.6% to 5.5%. But, on the opposite spectrum, the rich became richer. Tax savings were not used for job creation.

Detailed explanation-3: -Trickle-down economics is a term used in critical references to economic policies to say they disproportionately favor the upper end of the economic spectrum, i.e. wealthy investors and large corporations.