Supply Side Economics : Economic Policy

804 Words4 Pages
Do you ever wonder what economic policy is? Economic policy is actions that the government takes to influence the economy in different types of ways, or policies. The actions the government takes can include setting interest rates through the federal reserve, who handles all the money in currency. The government can also regulate how much money they use on different expenditures. The government also uses economic policy when they set tax rates. The types of policies are supply-side economics, demand-side economics, and monetary policy. This essay will cover all these policies. The first concept is supply-side economics. Supply-side economics is a theory that economists believe that economic growth can be most successfully created by putting more money into capital. This concept argues that by lowering barriers on production of goods, and services will also help the economy grow. The term ' 'supply-side economics ' ' was first believed to have been coined by journalist Jude Wanniski in 1975, but other sources say that the idea originally came President Nixon 's former economic advisor Herbert Stein. One way that supply-side economics was utilized in our history was during the presidency of Ronald Reagan. He planned to cut down tax rates by 30% during his presidency. He made this happen by relieving the tax payments of the rich, so they could invest more money in the economy. This stimulated jobs, and economic growth. Throughout his first term, tax rates were cut by
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