Which of the following is an accurate description of the theory of trickle-down economics?

Answer 1

"Trickle-down economics" and "trickle-down theory," is a term used in politics to classify economic policies perceived to benefit the wealthy and then "trickle-down" to the middle and lower classes. The theory states that if the top income earners invest more into the business infrastructure and equity markets, it will in turn lead to more goods at lower prices, and create more jobs for middle and lower class individuals. This sentiment is captured in John F. Kennedy's argument, "a rising tide floats all boats". Proponents argue economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. However, others have argued that "trickle-down" policies generally do not work,and that the trickle-down effect might be very slim.

Today "trickle-down economics" is most closely identified with the economic policies known as Reaganomics or supply-side economics.

Answer 2

An expression used by G. Myrdal (1975) to describe the filtering through of wealth from central, prosperous areas, to periphery, less wealthy areas. Thus, increased economic activity at the core may stimulate a demand for more raw materials from the periphery, and technological advance in the core region may be applied to other regions. A belief in the spread effect lies behind the planning of growth-pole; in a sense, the spread effect is the spatial equivalent of trickle-down economics.

Answer 3

Trickle down economics is an economic theory popularized and practiced during the last two decades. This policy implements tax cuts and other benefits to businesses and wealthy individuals under the idea that these parties are the captains of industry and the more wealth they have, the more they will spend and promote growth in the economy. If businesses and the individuals who possess capital have more money, they will hire more workers and people will have more money and spend more and this will cycle the wealth to even greater wealth. These policies were theoretically based off the Laffer curve. This curve is an upside down parabola where the x-axis is the tax rate and the y axis is revenue. So as the tax rate increases from zero, revenue increases as well, but if the tax rate increases to a certain point the revenue starts to fall. This fall is due to the theory that when the tax rate is high people will work less because so much of their income is being taken away by taxes. The most well known implementation of supply side economics was by President Ronald Reagan of the United States in the 1980s. Reagan's policies included reduction of government spending, reduced marginal tax rates on businesses and for the wealthy, and reduce regulation of the economy. These policies were used heavily around the world from the 1980s to the 2000s in countries such as Denmark, Finland, France, Philippines, Japan, and South Korea. These policies were theoretically based off the Laffer curve. This curve is an upside down parabola where the x-axis is the tax rate and the y axis is revenue. So as the tax rate increases from zero, revenue increases as well, but if the tax rate increases to a certain point the revenue starts to fall. This fall is due to the theory that when the tax rate is high people will work less because so much of their income is being taken away by taxes. Supply side economics is under the theoretical thought of neo-liberalism, as it advocates for more individual market liberties and was often implemented with policies that decrease the role of government in society. Also many large names in neo-liberalism like Milton Friedman and George Stigler were proponents of supply side economics.

Answer 4

It's the notion that corruption starts in high places, that if the wealthy and powerful are corrupt, and their corruption is tolerated by the guardians of Law and Order, then the population at large will follow their example.

Answer 5

The trickle down theory is the belief that if rich people have lower taxes they will create jobs for other people. Therefore letting rich people keep more of their money instead of taxing it at a higher rate will provide the nation with more money in the long run.

The basic fallacy is that rich people have been using their money to invest in China and India. They have been creating jobs in other countries. They have invested their money in modern factories which are more efficient that those in The United States and Europe. That has caused factories to close in the United States and Europe and has caused the loss of jobs. The trickle down theory had done the exact opposite of what it was supposed to do.

Answer 6

Trickle-Down Economics is the theory that by cutting taxes on the wealthy, the wealthy will re-invest this money in companies, allowing them to hire more workers and, therefore, the wealth will trickle down to poorer individuals who do not receive the tax cuts. While it sounds good in theory, evidence of how this policy has worked in the past has shown that it generally does not correlate with reality. When wealthy individuals receive tax cuts, they generally spend the money on themselves or save it in a bank.

Answer 7

trickle up theory is economic theory used to describe the flow of wealth from the poor to the affluent: It opposite to the trickle down theory.