PSAT Writing and Language Practice Test 24: Economic Regulation

Questions 1-11 refer to the following information.

Economic Regulation

1 First introduced by Senator John Sherman of Ohio, the U.S. Congress passed the Sherman Antitrust Act in 1890. The Act made illegal "every contract, combination in the form of trust or otherwise, or conspiracy in the restraint of trade." However, many critics of the time charged that the decidedly vague wording introduced by the pro-business senators who rewrote the act before its final approval 2 results in the emasculation of the law's anti-monopoly intent. Nevertheless, the Act was the first law to fight, even symbolically, against economic monopolies in the "open" market economy of the United States.

From the nation's beginning, many politicians and 3 influential, business leaders had maintained that the ideal economy in a democracy was one in which the government played a very limited role in regulating commerce. They argued that, by permitting businesses to pursue their own interests, the government actually promoted the interests of the nation as a whole. A quote often attributed to 4 Charles E. Wilson, a former chairperson of General Motors, accurately captured the prevailing attitude of big 5 business. "What's good for General Motors is good for the nation." Many of the leaders of trusts and monopolies in the 1800s co-opted the then cutting-edge terminology of Charles Darwin's theory of natural selection, 6 they argued that in an unrestrained economy, power and wealth would naturally flow to the most capable according to the principles of "social Darwinism." Their monopolies were thus natural and efficient outcomes of economic development.

Toward the close of the 1800s, however, an increasingly large and vocal number of lower- and middle-class dissenters felt that these hands-off economic policies of the federal government allowed monopolies like Standard Oil to manipulate consumers by fixing prices, 7 exploiting workers by cutting wages, and threaten democracy by corrupting politicians. Most directly, the trusts and monopolies completely destroyed the opportunities for competitors in their industries to do business effectively. The concerns of these working-class dissenters thus created a groundswell of support for the Sherman Antitrust 8 Act, and attempted to outlaw these monopolies and trusts. Even more important 9 then the direct effects of the Act, however, was the shift toward a new era of reform against monopolistic economic corruption and the rise of deliberate economic regulation in America. The federal government 10 realizing finally that 11 they had to take a more active role in the economy in order to protect the interests and rights of consumers, workers, and small businesses while tempering the dominating power of big business.