Industry Packet Answer Key
Page 8- Use the first paragraph under “Free Enterprise and Big Business” p. 581, to fill in the blanks and answer the questions below. As the US economy grew during the Second Industrial Revolution, the federal government favored FREE ENTERPRISE. This means that the government usually does NOT interfere with business. The government was not passing many laws to tell businesses what to do. This made it easier for some people to start their own business. They were called ENTREPRENEUERS.
Page 8- Continued…. Many entrepreneurs formed their business as corporations. Why would a person want to start a corporation? STOCK HOLDERS ARE NOT PERSONALLY RESPONSIBLE FOR THE DEBTS OF THE BUSINESS.ONLY LOSE THE MONEY YOU INVESTED. CAN SELL STOCKS WHEN YOU WANT. Since entrepreneurs had a lot of freedom, they became robber barons - MEN WHO USED THEIR POLITICAL POWER TO GET WEALTHY AND POWERFUL
Page 8- Continued What made a person a robber baron? BOUGHT OUT COMPETITORS, VERTICAL INTEGRATION – OWNING ALL STEPS TO TURN RAW MATERIALS INTO FINISHED PRODUCT, CUT OUT ALL COMPETITION Monopolies are bad for consumers because the owner can RAISE the price and LOWER the quality since there is no COMPETITION with other businesses. Some of these robber barons were considered to be philanthropists because they were GENEROUS with their money, donating millions to charity. How did entrepreneurs affect industrialization? CREATED NEW BUSINESSES