HISET Social Studies Practice

What is the main purpose of the Sherman Anti-Trust Act enacted in 1890?

1. To regulate government spending

2. To ban the formation of monopolies

3. To promote free trade

4. To establish minimum wage laws

The correct answer is: To ban the formation of monopolies

The Sherman Anti-Trust Act, enacted in 1890, was primarily designed to combat monopolies and promote fair competition in the marketplace. Its main purpose was to prohibit business practices that restricted trade and competition, effectively banning the formation of monopolies that could dominate and control whole markets, thereby harming consumers and stifling innovation. By addressing the power of large corporations and trusts, the Act aimed to ensure that no single entity could monopolize an industry, which is crucial for maintaining a healthy economy where multiple businesses can compete fairly. This helps in protecting consumer interests by promoting lower prices, higher quality products, and more choices in the marketplace. While the other options relate to aspects of economic regulation, they do not encapsulate the primary focus of the Sherman Anti-Trust Act, which is directly aimed at preventing monopolistic behavior.