Question

Which of these statements BEST describes the U.S. economy during the 1980s and early 1990s?

Answer 1

Answer:

C) There was a widening income gap between the rich and poor.

Explanation:

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Answer 2

There was a widening income gap between the rich and poor.

Answer: Option C

Explanation:

Ronald Reagan was the president of US during 1980s. He tirelessly worked to improve the US economy in his period. His economic policies were known as ''Reaganomics'' which mostly promoted free-market economics.

Reaganomics was made of 4 pillars and on of them is reduction of income tax. The rate of marginal tax was reduced from 70% to 28%. This in turn wielded a big income gap between the standard people and working class.

This tax reduction encouraged the people to work hard and for long time. That in turn tend to more savings and investments, more production and the economy's supply side were  also stimulated.