HISET Social Studies Practice

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the HISET Social Studies Test. Access practice exams and detailed explanations to boost your confidence. Prepare effectively and succeed in your test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What role does government regulation play in the free enterprise system?

It completely controls all economic activities
It provides guidelines to ensure fair competition
It prevents all business interactions
It enforces price controls on all goods

The correct answer is: It provides guidelines to ensure fair competition

In the context of a free enterprise system, government regulation plays a crucial role in establishing guidelines that promote fair competition among businesses. This ensures that no single entity can monopolize the market, allowing various companies to compete on an equal footing. By implementing regulations, the government aims to create a balanced playing field, where businesses can operate without deceitful practices or unfair advantages, thereby fostering a healthy economic environment. For example, regulations may include antitrust laws that prevent monopolistic practices, ensuring consumers have choices in the marketplace. Regulatory frameworks also help protect consumers’ rights and interests, encouraging innovation and diversity in products and services. This balance helps stabilize the economy, promotes consumer confidence, and facilitates ongoing competition, which are all essential elements of a thriving free enterprise system.