Government and the Economy Flashcard

Front

The United States has a mixed economy.

Back

True

Answer explanation

The U.S. government makes many kinds of rules that

affect how companies do business.

Front

In a mixed economy, the government does not interfere with business.

Back

False

Answer explanation

In a mixed economy, the government owns some

property, offers some services, and makes rules to protect

competition and consumers.

Front

In a command economy, the government owns all the services.

Back

True

Answer explanation

In a command economy, the government controls how

business operates.

Front

Without antitrust laws, there would be less competition between businesses.

Back

True

Answer explanation

Antitrust laws prevent large companies from forming

monopolies. That increases competition.

Front

Without antitrust laws, there would be more small companies.

Back

False

Answer explanation

Antitrust laws prevent large companies from gobbling up

small ones. Without antitrust laws, there could be few or

no small companies in some industries.

Front

The first antitrust law was passed in 1914.

Back

False

Answer explanation

The Sherman Anti-Trust Act was passed in 1890! The Clayton Antitrust Act was passed in 1914.

Front

The Federal Trade Commission doesn't care whether companies merge together.

Back

False

Answer explanation

The FTC closely monitors mergers. It will block a merger it thinks would harm competition.

Front

The more companies merge together, the more competition there is.

Back

False

Answer explanation

When companies merge together, that means fewer

companies are competing for consumers’ business!

Front

A tariff is a tax on goods from other countries.

Back

True

Answer explanation

Tariffs are taxes on goods that are imported from a foreign country.

Front

A tariff makes a foreign product less expensive in the United States.

Back

False

Answer explanation

Tariffs make foreign products MORE expensive. This helps

U.S. companies compete against unfair low prices.