Trickle Down Theory

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.

Notes:

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.

See also: Keynesian Economics, Reaganomics, Supply-Side Theory