Asked by Kennedy McCarthy on Jun 29, 2024
Verified
The Reagan tax cut of 1981 was an attempt to:
A) stimulate aggregate supply.
B) stimulate aggregate demand.
C) stabilize the value of the U.S.dollar.
D) increase demand for U.S.exports.
E) reduce the federal budget deficit.
Reagan Tax Cut
Refers to the economic policies implemented during Ronald Reagan's presidency, predominantly significant reductions in income tax rates.
Aggregate Supply
The aggregate amount of products and services that companies within an economy intend to sell over a designated timeframe.
Aggregate Demand
The complete requirement for every product and service within an economy, at a specific aggregate price level over a particular time frame.
- Interpret the effects of supply-side economics, including the impacts of tax cuts on aggregate supply.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
A
Explanation :
The Reagan tax cut of 1981, part of the economic policy known as "Reaganomics," was primarily aimed at stimulating aggregate supply by reducing the marginal tax rates on income from both labor and capital. This approach was based on supply-side economics, which posits that lower taxes can lead to increased investment, production, and economic growth.
Learning Objectives
- Interpret the effects of supply-side economics, including the impacts of tax cuts on aggregate supply.