A Level History - America - Practice Exam

Which of the following was a key policy of Andrew Mellon during his tenure as Secretary of Treasury?

1. Increased income taxes for the wealthy

2. Promotion of lowering tariffs on imports

3. Reduction of taxes for corporations and the wealthy

4. Limiting foreign investment in U.S. capital

The correct answer is: Reduction of taxes for corporations and the wealthy

The selection of the policy focusing on the reduction of taxes for corporations and the wealthy reflects Andrew Mellon's key approach during his time as Secretary of the Treasury from 1921 to 1932. Mellon believed in supply-side economics, advocating for lower taxes as a means to encourage investment and economic growth. His strategy was rooted in the belief that reducing tax burdens on businesses and the affluent would lead to increased capital investment, job creation, and ultimately, greater national prosperity. Mellon's policies resulted in significant tax cuts for the wealthy and corporations, which were part of a broader goal to stimulate the economy during the post-World War I recession and throughout the 1920s. His approach was instrumental in shaping the economic landscape of the Roaring Twenties, characterized by rapid industrial growth and expansion. This economic philosophy prioritized the belief that a robust private sector would fuel overall economic activity. Other options do not align with Mellon's policies as closely. For instance, increasing income taxes for the wealthy goes against his tax reduction agenda. Similarly, while tariff policies existed during his tenure, he did not focus on promoting lower tariffs; instead, tariffs like the Fordney-McCumber Tariff Act went in the opposite direction. Lastly, limiting foreign investment was not