USA HISTORY

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THE RISE OF POLITICAL CONSERVATISM 1980 1992

REAGANOMICS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
When spending more on military and lowering taxes means you have more of money.
A
True
B
False
C
Either A or B
D
None of the above
Explanation: 

Detailed explanation-1: -The demand for money is the LM curve, when the government spends more money, it increases the AE curve thus increasing GDP. Therefore the investment/saving curve will shift due to the increases GDP which leads to increased Savings which leads to a lower interest rate.

Detailed explanation-2: -a) The statement is true. The government collects a higher rate of taxes from the rich and spends it on the welfare of the poor. This helps to reduce the inequalities of income.

Detailed explanation-3: -The United States’ military spending in 2021 reached $801bn a year according to the Stockholm International Peace Research Institute.

Detailed explanation-4: -If a country faces a decrease in income tax revenue, it will spend less on welfare schemes. Reducingtax rates slightly will lower the risk of tax avoidance.

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