Question

Explain the assumptions behind the theory of supply-side economics, and describe the consequences of Reaganomics

Answer 1

The assumptions are that if you cut taxes and costs for companies, then the company owners and investors will be able to bring about the growth of economy and employ more people. The benefits were that the economy entered a peacetime and people were generally living better. The bad side was that public debt increased by a lot and this would come back to haunt the people later after Reagan was long gone.