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Economic Effects of Industrialization

Economic Effects of Industrialization. LT 3: I can explain the impact of industrialization on American economics. LT 4: I can explain the impact of industrialization on American politics. What is a monopoly?.

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Economic Effects of Industrialization

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  1. Economic Effects of Industrialization LT 3: I can explain the impact of industrialization on American economics. LT 4: I can explain the impact of industrialization on American politics.

  2. What is a monopoly? • Monopoly—when a business is able to control all aspects in a particular industry and eliminate competition to maximize profit.

  3. Horizontal Integration • Business buys out the competition. • EX: AT&T buys T-Mobile

  4. Vertical Integration • Business buys out suppliers • EX: Oil companies

  5. Holding Company • A corporation created to buy out stock of companies • EX: Berkshire Hathaway

  6. Trust • Merger of companies where companies are controlled by a board of trustees in order to develop a monopoly. • EX: Standard Oil of Ohio

  7. Impacts of Monopolies • Allowed for major growth of industry • Extreme profits were made • Competition destroyed • Limits choice • Prices higher • Large gap between owners and workers

  8. Why were monopolies allowed? • Laissez Faire business policies supported by the government. • Close ties between businessleaders and government leaders.

  9. Economic Impacts • U.S. becomes leading industrial power in the world. • Despite poor conditions, more people are earning more money than before. • This also encourages industrialization as more people have money to buy goods.

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