Unit 10 Lesson 5

In the late nineteenth century, political leaders in the United States gradually became convinced that certain monopolies were stifling competition and interfering with the free market. They were especially concerned about a type of monopoly called a trust. A trust exists when several corporations in the same line of business work together to eliminate competition from the market and regulate prices. By the latter part of the nineteenth century, trusts had gained tight-fisted control over the markets for petroleum, steel, coal, beef, sugar, and other commodities.

How did the federal government respond to this concern during the late 1800s and early 1900s?

• The federal government took property away from the corporations that had created monopolies and trusts.

• The federal government passed laws banning monopolies and trusts to prevent the restraint of competition.

• The federal government took over the industries that had been completely stifled by monopolies and trusts.

• The federal government ratified an amendment that prevents large corporations from merging into monopolies and trusts.

. . . the father of modern socialism and communism, [he] was the most significant critic of capitalism as it developed during the early Industrial Revolution. He envisioned a society where social classes would vanish and the people would own all property in common.

• Karl Marx

• Adam Smith

• Josef Stalin

• Mao Zedong

According to this chart, what is one result of the Federal Reserve sharply decreasing the discount rate?

• Deflation occurs as the economy expands.

• Deflation occurs as the economy contracts.

• Inflation occurs as the economy expands.

• Inflation occurs as the economy contracts.

An increasing Department of Defense budget is an example of what kind of spending?

• mandatory

• entitlement

• discretionary

• uncontrollable

This photograph shows a worker’s pay stub. What does this image suggest about federal taxes today?

• About a third of the taxes withheld are for Social Security.

• About half of the taxes withheld are for Medicare

• About two-thirds of the taxes withheld are for Medicare.

• Almost three-fourths of the taxes withheld are for Social Security.

Under which of the following circumstances might the United States decide to eliminate tariffs on a particular import from another country?

• if the item cannot be produced in the United States

• if the United States has a trade deficit with the country

• if the U.S. economy is booming

• if the country is not an ally of the United States

What agency is responsible for overseeing of the stock market, prevents insider trading, fraudulent accounting practices, and ensures that publicly traded companies truthfully disclose finances. This agency has the authority to bring court action against corporations that violate security laws.

• SEC (Securities and Exchange Commission

• FCC (Federal Communication Commission)

• EPA (Environmental Protection Agency)

• DOC (Department of Commerce)

Communism is an economic system that allows for individuals to own the means of production with the government having a limited role.

• True

• False