Chapter 30 Questions - 1 What were Ronald Reagan's economic goals and how did he use Reaganomics to achieve them What were the major components

Chapter 30 Questions - 1 What were Ronald Reagan's...

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1. What were Ronald Reagan's economic goals and how did he use Reaganomics to achieve them? What were the major components of "Reaganomics"? Did Reaganomics work? Reaganomics was the Reagan Administration’s economic plan that was composed of a set of policies.This plan was based on the idea that if wealthy Americans and corporations were freed from heavy taxes and regulations it would benefit the economy overall. This was believed to benefit the economy since it would stimulate business growth, which would consequently increase tax revenues. This policy was similar to Hoover’s trickle down theory since it also was centered around minimizing taxes for big businesses, believing that the money would “trickle down to the lower classes.” To achieve this goal, the Federal Reserve Board increased interest rates to help flight continuing inflation. The 1981 Economic Recovery Act also reduced income tax rates for most Americans. However, this plan was opposed by people like Stockman who revealed this plan of trickle down economics attempted by both Hoover and now Regan was based more on faith rather than economics. By 1983, an economic surge due to consumer spending and the stock market increasingly aided this economic development, but by 1987 all progress was reversed. On October 19, 1987, the market crashed, and even though it was back relatively soon, it greatly affected investors. Overall, budget and trade deficits, and interest rates were the legacy of Regan’s economic plan. 2. Discuss Ronald Reagan's strategy for waging the Cold War. What were his goals? What means did he use to pursue them? How successful was he in achieving his goals? Reagan’s strategy for waging the Cold War was centered around efforts aimed to defeat the Soviet Union, which is why he broke from his successor’s policy of detente. Regan increased America’s nuclear arsenal with his expanded Pentagon’s budget since he believed that after Vietnam America became weak. To deter the Soviets during this time, the Reagan administration successfully deployed 572 nuclear missiles within Western Europe by 1983. However, as the talk

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