What was a common outcome of the government's attempt to stimulate the economy in the 1980s?

Study for the AMSCO AP United States History Exam (APUSH) – Period 9. Enhance your knowledge with flashcards and multiple-choice questions. Each question comes with hints and explanations. Get ready for your exam!

The correct answer is based on the understanding of the economic policies implemented during the 1980s, particularly under President Ronald Reagan's administration. The era is often characterized by supply-side economics, which focused on reducing taxes, deregulation, and promoting business investment. These policies led to increased consumption as consumers benefited from lower taxes and an economic boom, which in turn stimulated demand for goods and services.

However, increased consumption also meant that the U.S. imported more products to meet the rising demand, contributing to significant trade deficits. This occurred because while domestic production did grow, it was not always sufficient to meet the consumption levels encouraged by the tax cuts and increased disposable income. As a result, the nation found itself importing more than it was exporting, leading to a widening trade deficit during this period.

The other options do not align with the outcomes observed during the 1980s. Unemployment did not necessarily decrease uniformly across all sectors, wage gaps remained a significant issue, and economic inequality often worsened, particularly affecting the middle class rather than enhancing their economic situation.

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