Apentix/AP US History/Unit 9: Period 9 (1980-Present)/Question
AP US Historymediummcq1 pt

Which of the following best explains the relationship between the Economic Recovery Tax Act of 1981 and the federal budget in the 1980s?

A.The tax cuts were followed by record budget deficits because promised spending cuts never matched the lost revenue
B.The tax cuts immediately paid for themselves through higher revenues
C.The tax cuts were paired with equal reductions in defense spending
D.The tax cuts had no measurable effect on the federal budget

Explanation

Core Concept

Revenues fell short while defense spending grew, and deficits roughly tripled during the decade. The offsetting domestic spending cuts enacted in 1981 did not keep pace with the tax reductions.

Correct Answer

AThe tax cuts were followed by record budget deficits because promised spending cuts never matched the lost revenue

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