Question

The economic situation at the beginning of Ronald Reagan’s first term in which unemployment and inflation were both high was referred to as

Answer 1

D. Stagflation

Answer 2

The answer is Reaganomics. To solve the economic problems, he proposed a free market approach with across the board tax cuts. He believed that this would stimulate business and expand the tax base to cover for revenue loss. This resulted in the decrease of inflation and more jobs being offered to the people.