Trickle-down theory

An economic theory which states that investing money in companies and giving them tax breaks is the best way to stimulate the economy.

Investopedia Says:
Proponents of this theory believe that when government helps companies, they will produce more and thereby hire more people and raise salaries. The people, in turn, will have more money to spend in the economy.

Related Links:
Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more! Economics Basics
Take a look at the tenets, assumptions and challenges of monetarism's principle theory. What Is the Quantity Theory of Money?

"Trickle-down theory" can refer to two different but related concepts:

• Trickle-down effect, a model of product adoption in marketing
• Trickle-down economics, a rhetorical term for tax cuts on high incomes and business activity

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