Government and the Economy Quiz

The United States has a mixed economy.

• True

• False

Answer explanation

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

affect how companies do business.

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

• True

• False

Answer explanation

In a mixed economy, the government owns some

property, offers some services, and makes rules to protect

competition and consumers.

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

• True

• False

Answer explanation

In a command economy, the government controls how

business operates.

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

• True

• False

Answer explanation

Antitrust laws prevent large companies from forming

monopolies. That increases competition.

Without antitrust laws, there would be more small companies.

• True

• 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.

The first antitrust law was passed in 1914.

• True

• False

Answer explanation

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

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

• True

• False

Answer explanation

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

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

• True

• False

Answer explanation

When companies merge together, that means fewer

companies are competing for consumers’ business!

A tariff is a tax on goods from other countries.

• True

• False

Answer explanation

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

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

• True

• False

Answer explanation

Tariffs make foreign products MORE expensive. This helps

U.S. companies compete against unfair low prices.