The correct answer is A) The economy would improve if Americans had more money to spend.
What Reagan believed about the economy as the basis for Reaganomics was that the economy would improve if Americans had more money to spend.
Reaganomics was the term that identified the economic policies of President Ronald Reagan in 1981. President Reagan tenure was from 1981 to 1989 and was the 40th President of the U.S. The economic policies of Reagan aimed to cut taxes, increase military spending, and the decrease social spending.
The other options of the question were, b) the federal deficit would shrink if Americans paid more taxes, c) if the American people had more money, they would be more likely to save than spend, and d) the emergence of the internet would lead to “dotcom blue”.