Test Bank for All Chapter Law, Business and Society, 12e (McAdams) Chapter 1 Capitalism and the Role of Government Answer Key 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
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