GED Social Studies TestU.S. HistoryMedium
A historian is examining the economic policies of the Gilded Age (late 19th century) in the United States. Which of the following policies was most characteristic of this era?
- ALaissez-faire capitalism, with minimal government intervention in the economy.
- BStrict antitrust legislation to prevent the formation of monopolies.
- CExtensive government regulation of industries to protect workers and consumers.
- DProgressive taxation aimed at wealth redistribution.
Show answer & explanationAnswer & explanation
Correct answer: A. Laissez-faire capitalism, with minimal government intervention in the economy.
The Gilded Age was largely characterized by laissez-faire capitalism, meaning that the government adopted a 'hands-off' approach to the economy. This allowed for rapid industrial growth but also led to significant wealth inequality, exploitative labor practices, and the rise of powerful monopolies.
Why the other options are wrong
- B. While some antitrust sentiment existed, effective strict antitrust legislation was generally not a hallmark of the Gilded Age, which saw the rise of powerful trusts and monopolies.
- C. Extensive government regulation was more characteristic of the Progressive Era that followed the Gilded Age, not the Gilded Age itself.
- D. Progressive taxation and wealth redistribution were ideas that gained traction later, during the Progressive Era and New Deal, not the Gilded Age.
Laissez-faire Capitalism
An economic system in which transactions between private parties are free from government intervention such as regulation, privileges, tariffs, and subsidies.
- Prevalent in the U.S. during the Gilded Age.
- Associated with minimal government oversight of business.
- Often led to the growth of monopolies and wealth disparity.
Memory trick: Gilded Age's gleam, minimal government's dream.