A Level History - America - Practice Exam

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What does laissez-faire mean in the context of industry?

A policy promoting government intervention
A system of universal wage equality
A policy that allows owners to set working conditions without interference
A strategy for regulating prices in the market

The correct answer is: A policy that allows owners to set working conditions without interference

Laissez-faire, in the context of industry, refers to an economic philosophy advocating minimal government intervention in business affairs. This concept means that business owners are allowed to establish their working conditions, set prices, and operate their enterprises as they see fit, free from government regulation or interference. The essence of laissez-faire is rooted in the belief that free markets can regulate themselves through competition and the actions of individuals seeking their own interests. This principle gained prominence during the Industrial Revolution, where the rapid growth of industries and the rise of capitalism were often accompanied by calls for reduced governmental controls over economic activities. The other choices suggest ideas that contradict the fundamental tenets of laissez-faire. For instance, promoting government intervention or regulating prices directly opposes the hands-off approach of laissez-faire. Similarly, while universal wage equality may sound appealing, it assumes regulatory oversight and intervention that is not aligned with laissez-faire principles.