Test Bank for Law, Business and Society 12th Edition by Tony McAdams, Kiren Dosanjh Zucker, Kristofe

Test Bank For Law, Business and Society 12th Edition by Tony McAdams, Kiren Dosanjh Zucker, Kristofer Neslund, Kari Smoker Chapter 1-18 Answer key is at the end of each chapter Chapter 1 Capitalism and the Role of Government 1) The American financial community's near collapse in late 2008 was most directly ignited by the government's flooding the market with cash. Answer: FALSE Explanation: The American financial community's near collapse in 2008 was most directly ignited by the subprime mortgage crisis; a situation in which the nation's housing bubble burst and millions of Americans were no longer able to pay their home mortgages. Instead of continuing their sometimes meteoric rise in value, those homes had plunged in price and much of the total real estate market had essentially imploded. Difficulty: 1 Easy Topic: Capitalism: Reduce Government? Learning Objective: 01-01 Describe capitalism and its relationship to individual rights. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Capitalism in America was built on the strong philosophical foundation of centralized control by the government. Answer: FALSE Explanation: Rather than centralized control by the government, capitalism in America was built on the strong philosophical foundation of personal freedom and private property rights. Our great natural resources and personal ambition led to extraordinary prosperity. Difficulty: 1 Easy Topic: Capitalism: Reduce Government? Learning Objective: 01-01 Describe capitalism and its relationship to individual rights. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) Democratic capitalism and state capitalism create equal economic and political advantage making them economic and political allies. Answer: FALSE Explanation: Democratic capitalism and state capitalism trade with each other for mutual advantage but are economic and political rivals. Democratic capitalism in the United States, Japan, Denmark, and other nations favors business to create wealth and government to regulate as needed. State capitalism in countries such as China, Russia, and Saudi Arabia employs the market to build wealth, which, in turn, is controlled and distributed by the state for its political purposes. 1 Copyright © 2018 McGraw-Hill