AMSCO AP United States History Exam (APUSH) – Period 9 Practice Test 2026 - Free APUSH Practice Questions and Study Guide

Reaganomics, the economic policy promoted by President Ronald Reagan during the 1980s, aimed to stimulate the economy through supply-side economics, which included significant tax cuts, particularly for the wealthy and businesses. One of the hallmark policies of Reagan's tax reform was the reduction of the top income tax rate from 70% to 28%. This drastic decrease was intended to incentivize investment and spending, with the belief that benefits would trickle down to the broader economy.

This approach reflects the core tenets of supply-side economics, asserting that lower taxes on individuals and businesses would increase entrepreneurship and investment, ultimately leading to economic growth and job creation. The policy resulted in a revision of the tax code that simplified tax brackets and aimed to encourage economic activity. Consequently, the choice indicating a decrease in the top income tax rate to 28% accurately captures the essence and impact of Reaganomics during that period.