"Education is the best economic policy there is". (Tony Blair) Economic policy is defined as “a government policy for maintaining economic growth and tax revenues". (The free dictionary) Economic policy is the actions taken by the government in the economic field. They make decisions on the tax rate, how much to spend, how much to import and export. Supply-side economics thinks that economic growth can be most effectively created by lowering barriers for people to produce goods and services as well as invest in whatever they want. Demand-side economics is a spinoff of Keynesian economics. They believe that the government and consumers are more important influencing economic activity than free market forces like corporations.
Supply-side economics was developed in the 1970s in response to Keynesian economics. Their guiding principal is that they’re in favor of a low tax rate for the working-class. Supply side economics believe that production is the solution to economic prosperity and that consumption is merely a secondary consequence. During WWII American industry just pumped out goods for the war, which helped bring the economy out of the Great Depression and usher in a new era for America. A very popular supply-side economic policy is Reaganomics. This promised an across-the-board reduction in income tax rates and an even larger reduction in capital gains tax rates. The opposite of supply-side economics is demand-side economics. Demand-side economics is a spinoff of Keynesian economics. It is directly associated to Keynesian economics, and its guiding principle is he government and consumers are more important influencing economic activity than free market forces like corporations. In order to properly execute the demand-side economy is that a government should cut taxes and increase infrastructure spending during an economic downturn, and focus on increasing tax revenue during an economic upturn. An example of this would be FDR's policies during the...
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