Main Answer:
Reaganomics and Thatcherism embraced supply-side economics, emphasizing tax cuts and reduced regulations to stimulate economic growth and productivity. a. Supply-side economics.
Therefore, the correct answer is a. Supply-side economics.
Step-by-step explanation:
Reaganomics in the USA and Thatcherism in Britain were both characterized by a commitment to supply-side economics. This economic approach emphasizes stimulating economic growth through policies that focus on boosting the production side of the economy. The key idea is that by reducing taxes, especially on businesses and high-income individuals, and minimizing government regulations, there would be an increase in investment, job creation, and overall economic productivity.
Supply-side economics gained prominence during the 1980s as a response to the perceived failures of Keynesian economics, which had been dominant in the preceding decades. Unlike Keynesianism, which advocates for government intervention and demand management to stabilize the economy, supply-side economics asserts that promoting entrepreneurship and incentivizing production will naturally lead to prosperity.
Furthermore, Reaganomics and Thatcherism incorporated elements of monetarism, emphasizing the control of the money supply to curb inflation. Both leaders believed that a stable currency was crucial for economic growth. The rejection of communism in favor of these market-oriented policies marked a departure from the state-centric economic models, aligning more closely with the principles of free-market capitalism.
In summary, supply-side economics was the central tenet of Reaganomics in the USA and Thatcherism in Britain. These leaders championed policies that aimed to enhance economic performance by reducing tax burdens, minimizing regulations, and fostering a pro-business environment.
Therefore, the correct answer is a. Supply-side economics.