Name the significant economic policy that characterized President Reagan's presidency in the 1980s.

The significant economic policy that characterized President Reagan's presidency in the 1980s is known as supply-side economics, commonly referred to as Reaganomics. This approach emphasized the idea that reducing taxes, particularly for the wealthy and businesses, would lead to increased investment, job creation, and overall economic growth. The premise was that as businesses retained more of their earnings due to lower taxes, they would reinvest that money back into the economy, increasing production capacity and eventually benefiting all levels of society.

Reaganomics also included deregulation of industries and a focus on reducing government spending on social programs while advocating for a balanced budget. The intention was to foster an environment of entrepreneurship and innovation among businesses, which was expected to eventually "trickle down" benefits to the lower-income classes; however, this term specifically refers to the theory behind the policies, rather than the actual policies themselves.

In contrast, the other options represent different economic theories or approaches that were either less relevant to Reagan's presidency or were characteristic of other periods in American history. For example, Keynesian economics focuses on increasing government expenditures and lowering taxes to stimulate demand and mitigate economic downturns, which was more emblematic of earlier administrations. Free trade policies were also prominent during the Reagan era but