AP US History : Domestic Politics 1980–Present
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Example Questions
Example Question #1 : Domestic Politics 1980–Present
Reagan's supply-side economics was based on the theory that __________.
taxing middle-class Americans at a higher rate would allow the federal government to reduce taxes for those beneath the poverty line.
reducing corporate taxes would cause those corporations to spend the additional money to purchase equipment and hire more employees, creating a trickle-down effect.
reducing tariffs on America's largest trading partners would encourage other countries to spend more money on American products.
increasing taxes on America's wealthiest one-percent of the population would allow the federal government to reduce taxes for those beneath the poverty line.
heavily investing in the infrastructure through federal work programs would stimulate the economy.
reducing corporate taxes would cause those corporations to spend the additional money to purchase equipment and hire more employees, creating a trickle-down effect.
Reagan believed that by decreasing taxes on corporations, additional money would be available to purchase machinery, hire new employees, open new stores, etc. The money used for these purposes would cause additional corporations and individuals to receive more money and, in turn, spend it. This was called the "trickle-down effect." Reagan also decreased taxes for individuals using the same theory.
Example Question #2 : Domestic Politics 1980–Present
"In the days ahead I will propose removing the roadblocks that have slowed our economy and reduced productivity. Steps will be taken aimed at restoring the balance between the various levels of government. Progress may be slow, measured in inches and feet, not miles, but we will progress. It is time to reawaken this industrial giant, to get government back within its means, and to lighten our punitive tax burden. And these will be our first priorities, and on these principles there will be no compromise." Ronald Reagan, First Inaugural Address, 1981.
What was a key component of the economic program described by Reagan in the speech above?
Cutting taxes, especially on the those with the highest incomes, in order to stimulate economic growth
Increase the amount of regulation of the U.S. economy
Increase the number of imports in the U.S. economy to spur economic growth
Increases taxes to promote government spending
Cutting taxes, especially on the those with the highest incomes, in order to stimulate economic growth
A central strand of supply-side economics, or "Reagonomics," as it is known, was cutting taxes, particularly on the those with the highest incomes, in order to stimulate economic growth. According to the theory, this economic growth would will eventually "trickle down" to all taxpayers and help the economy as a whole.
Example Question #3 : Domestic Politics 1980–Present
Ronald Reagan was elected President during a time of economic stress in America. Inheriting a struggling economy, Reagan formulated two new tax programs, the Economic Recovery Act of 1981 and the Tax Reform Act of 1986. Both Acts lowered the tax rates to give tax relief to all Americans (but were, admittedly, heavily skewed to tax relief for the exceptionally wealthy). The Economic Recovery Act of 1981 indexed tax rates for inflation. The Tax Reform Act of 1986 efficiently closed loopholes in the tax law, as well as lowering the tax rates again. President Ronald Reagan referred to the 1986 Act as "a second American Revolution for hope and opportunity." He believed that America’s economy, and the American taxpayer, were struggling under an imbalanced tax burden, unnecessary social spending, and excessive government regulation.
Reagan based his tax plan on what economic theory?
Neoclassical Synthesis
Laissez-Faire Capitalism
Neo-Malthusian Theory
Keynesian Economics
supply-side economics
supply-side economics
The economic plan of President Reagan was based on the belief that changes in marginal tax rates influence economic activity. He strongly believed that high tax rates discouraged work, investment and growth. Additionally, he felt that consumption, living standards and income levels interact to effect the economy. The marginal tax rate was also important because it indicated to the wage earner how much “additional” income would be taxed and sent to the government and how much income would be maintained by the wage earner. Thus, it was, ostensibly, an incentive to work (some would argue that poverty and the desire to avoid a life of struggle and hardship in a society with a rapidly shrinking social net would similarly function as incentive). This is a fundamental tenet of supply side economics. Reagan’s efforts to improve the economy in his two tax plans were based on supply side economic theory.
Example Question #4 : Domestic Politics 1980–Present
The major political parties in the United States, the Democratic Party and the Republican Party, are well recognized to the voting public. There are 50 additional political parties in the United States, however, that are active and offer candidates for President. These are collectively known as Third Parties. Third Parties serve an important role in the United States political system. These parties, formed by individuals with particular interests, issues, and ideologies, force the major parties to address new issues and can influence an election by taking votes from both major party candidates during an election year. Third Parties are also formed when individuals, dissatisfied with the major parties, split off from the major party. This type of Third Party is also called a Splinter Party. Third Parties have influenced American elections since 1912. There have been many well-known Third Party Presidential candidates.
The election of 1992 saw a third party candidate run for the Presidency. This candidate was one of the most successful third party candidates since 1912. This candidate did not win any Electoral College votes but did win a respectable percentage of the popular vote. Who was this candidate, what percentage of the popular vote did he win and what was the name of his party?
Robert Dole, 37% of the popular vote, The New Republican Party
Newt Gingrich, 35% of the popular vote, The Free Speech Party
George Wallace, 46% of the popular vote, The American Independent Party
Ross Perot, 18.9% of the popular vote, The Independent Party
Patrick Buchanan, 20% of the popular vote, The Reform Party
Ross Perot, 18.9% of the popular vote, The Independent Party
Patrick Buchanan is a former senior aide to Presidents Richard Nixon, Gerald Ford, and Ronald Reagan. He attempted, unsuccessfully, to run for office as head of the Reform Party in 2000. Robert Dole is the former Senator from Kansas and did run for the Presidency, not as a third party candidate but as a member of the Republican Party. George Wallace ran as a third party candidate in 1968 earning 46 Electoral College votes for the American Independent Party. Newt Gingrich is a political adviser, author, and a former member of the House of Representatives where he also served as the Speaker of the House. Gingrich attempted a run for the Presidency in 2012 but did not receive the nomination of his political party, the Republican Party. Ross Perot ran in the 1992 election as The Independent Party candidate receiving 18.9% of the popular vote making him one of the most successful third party candidates since 1912.
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