The economic policies known as 'Reaganomics' were primarily based on the theory of which of the following?

The correct answer to the question "The economic policies known as 'Reaganomics' were primarily based on the theory of which of the following?" is Option B: Supply-side economics, focusing on tax cuts and deregulation.

The other options — A) Keynesian economics, emphasizing government spending, C) Mercantilism, promoting government control over trade, D) Socialism, advocating for collective ownership of production — are incorrect for this CLEP Exam Prep question. As explained above: Reaganomics aimed to stimulate the economy by reducing taxes on corporations and the wealthy, believing this would encourage investment, production, and job creation.