Answer:
The Republican administrations of the 1920s pursued the economic policy of substantially reducing taxes
Explanation:
The Republican administration led by President Warren G Harding and Vice President Calvin Coolidge upon taking office in 1920 instituted and introduced conservative economic policies designed to minimize the government's role in the economy and reduce d taxes. Secretary of the Treasury, Andrew Mellon engineered and won passage of the "Revenue Act of 1921", a major tax cut that substantially reduced tax rate on the wealthy.
The changes in the marginal income tax rates caused individuals and business alike to change their behaviour. The tax rate cuts cause the tax base to expand as tax avoidance falls and the economy grows.
Both of these scenarios show that there is a correlation between the tax changes and government spending. In the first scenario taxes were increased so that the government can use that money for its military purposes. In the other scenario the taxes were cut but at the expense of the unemployment benefits. The money government can use comes from the budget which is formed through taxes and the government decides how to allocate its resources.