Chapter 14 section 2 Growth of Big Business

1. What is a Robber Baron? Business leader who built their fortunes by stealing from the public

2. List 5 Characteristics of a Robber Baron. Drained the country of its natural resources Persuaded public officials to interpret laws in their favor Drove competitors to ruin Paid workers a meager wage and forced them to work under dangerous and unhealthy conditions

3. What is a Captain of Industry? Business leaders who served nation in positive way

4. List 3 characteristics of a Captain of Industry. Increased supply of goods by building factories, raising productivity and expanding markets Created jobs that enabled many Americans to buy new goods Founded museums, libraries and universities

5. Who is Andrew Carnegie? Captain of industry (Steel)- used money earned to help the poor

6. What is a Philanthropist? Person who gives money donations to worthy causes Example: Carnegie donated money to about 3.000 free public libraries, supply artists and research institutions

7. What is Social Darwinism? Society should do as little as possible to interfere with people’s pursuit of success Gov’t would stay out of affairs of business, those who were fit would succeed and become rich – society would benefit and weed out the unfit

8. What is a Monopoly? Complete control of a product or service Business bought its competitors or drove them out of business Consumers would only have 1 company to buy from and company free to raise its price

9. What is a Cartel? A loose association of businesses that makes the same product- members agreed to limit the supply of their product and thus keep prices high

10. What is a Trust? A group of separate companies placed under the control of a single managing board

11. Who is Rockefeller Oil Tycoon Made money by getting refunds from railroad friends and able to sell oil lower then competitors and drive them out of business or buy them out Created trust because it was against the law for one competitor to own stock of another

12. What is the Sherman Anti-Trust Act? Law that outlawed any combination of companies that restrained interest or commerce (Ineffective for nearly 15 years because federal government rarely enforced)

13. What is horizontal consolidation? Involved bringing together many firms that were in the same business Example: Rockefeller-standard oil page 417 chart/picture

14. What is vertical consolidation? Gaining control of the many different businesses that make up all phases of a products development Example: Andrew Carnegie (steel) purchased steel plants, mines that supplied iron and railroads to transport good

15. What is an economy of scales? Companies that controlled all stages of production could drive out competitor because as cost went up for others it was cheaper if company had all phases and could sell goods lower

16. What is the Business Cycle? Periodic growth that contractions of a nations economy