The Reagan administration's 1981 investment tax changes were designed to
A)stimulate aggregate demand and thereby reduce unemployment
B)stimulate aggregate demand and thereby increase economic growth
C)stimulate aggregate supply and thereby increase economic growth
D)decrease aggregate demand in order to reduce inflation
E)increase tax revenues to reduce the federal budget deficit

Question

Quizplus · Accepted Answer

The Reagan administration's 1981 investment tax changes were designed to stimulate aggregate supply and thereby increase economic growth. The tax changes included reduced income tax rates, accelerated depreciation schedules, and a reduction in capital gains taxes. These changes were aimed at incentivizing businesses to invest more in productive capital, which would increase the economy's capacity to produce and lead to sustained economic growth.

The Reagan Administration's 1981 Investment Tax Changes Were Designed to