QUESTION 43 In an approach to economic policy that came to be called "Reaganomics,President Ronald id Reagan sought to keep interest rates high while A. Increasing the amount of money in dirculation B. cutting spending to reduce the budget deficit. C. borrowing heavily to build up the millitary. D. asking Congress to pass a huge tax cut.

## Step 1<br />The question is about the economic policy of President Ronald Reagan, known as "Reaganomics". This policy is associated with supply-side economics, which focuses on increasing economic growth by lowering taxes and reducing government spending.<br />## Step 2<br />The question asks us to identify the action that Reagan took while keeping interest rates high. The options provided are:<br />A. Increasing the amount of money in circulation<br />B. Cutting spending to reduce the budget deficit<br />C. Borrowing heavily to build up the military<br />D. Asking Congress to pass a huge tax cut<br />## Step 3<br />We need to identify the action that aligns with the principles of Reaganomics. <br />## Step 4<br />Option A, increasing the amount of money in circulation, would likely lower interest rates, not keep them high. <br />## Step 5<br />Option B, cutting spending to reduce the budget deficit, is a form of reducing government spending, but it doesn't directly relate to the goal of keeping interest rates high.<br />## Step 6<br />Option C, borrowing heavily to build up the military, would increase government spending, not decrease it.<br />## Step 7<br />Option D, asking Congress to pass a huge tax cut, aligns with the principles of Reaganomics. By reducing taxes, individuals and businesses would have more disposable income, which would stimulate economic growth and potentially lead to higher interest rates.