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Read the following passage and answer the questions that follow.Socialists like Hugo Chavez in Venezuela or Indira Gandhi in India, are famous for nationalizing the largest corporations. But the U.S. government has just taken over three of its biggest corporations within two weeks. Has the United States turned socialist? US right-wingers moan that this is indeed what has happened. Meanwhile, Indian leftists are stunned at nationalizations in a country they view as pitilessly capitalist.Two of the nationalized corporations, Fannie Mae and Freddie Mac, are by far the largest mortgage lenders in the world, with $5 trillion of mortgages and loans on their books. To put that in perspective, that's five times the size of India's GDP. The third corporation, AIG, is the largest insurance company in the world. No nationalization in countries that profess to be socialist has ever been so large.Leftists suspect that the U.S. takeovers are simply aimed at rescuing wealthy shareholders. Not so. The government will acquire 79.9 percent of the shares of these companies at virtually zero cost, pushing the share price down close to zero. So wealthy shareholders have been wiped out, and the bosses of all three corporations have been sacked.This isn't a rescue of the rich. It's a rescue of ordinary people who need mortgages and a functioning housing market which would have collapsed had Fannie Mae and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the entire economy, as happened during the Great Depression of the 1930s.The usual procedure is to let mismanaged companies go bust, penalizing the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it's sensible to have a government takeover before they collapse - even from a capitalist point of view. This is a kind of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn't lose them), and that's vital in a democracy.Does this mean the United States is becoming socialist? Let's distinguish between two meanings of the word. For many people, socialism means state ownership of the means of production, as in the Soviet Union and Mao's China. The U.S. isn't going in that direction. But socialism can also imply an activist state that provides basic needs for all people, and creates a safety net for those hit by misfortune, old age and sickness. The United States has long been socialist in this second sense, and it's becoming more so.Modern capitalist states are all welfare states. Enormous bureaucracies have been created to tax the rich, regulate business, provide subsidies and special schemes to the needy, thwart environmental harm and health hazards, and so on. The list is long and keeps growing.It couldn't be otherwise in a democracy. Contrary to Marx's assumptions, legislators get elected by catering to the masses, even while taking money from corporations. Legislators constantly create new rules and regulations to protect consumers, retirees and other groups of voters. Hence, the United States has become a land of rising red tape. Between 1970 and 2006, the number of pages in the Federal Register (which lists all regulations) shot up from 20,036 to 78,000. The number of regulators in the service of the federal government rose from 90,000 to 241,000. In the first six years of the George W Bush era (2000-2006), the number of pages of regulations increased by over 10,000, and regulators by over 65,000.This is galloping socialism, often criticized as bureaucracy run amok. The U.S. is less welfarist than European countries, but isn't too far behind. U.S. legislators have expanded entitlements for the aged and sick so greatly that state spending on social security, Medicare and Medicaid is projected to rise from 7 percent of GDP today to almost 20 percent by 2020. So much for the myth that the United States is a heartless capitalist ogre. In fact, it combines capitalism with welfarism and often tilts toward the latter when the two conflict.Since US politicians get elected by constantly promising to save citizens from pain, they have now saved citizens from corporate bankruptcies that would threaten the entire economy and throw millions of lives into disarray. This is no more than an extension of the safety-net principle.This is far different from Indira Gandhi's socialism. Her nationalization was aimed at giving the state a stranglehold on industrial production and seizing the commanding heights of the economy. These measures didn't benefit ordinary folk at all.The US takeovers, by contrast, are temporary matters, to be followed by re-privatization once the crisis is resolved. The corporations involved will be obliged to sell chunks of their assets to pay off their debts and attain stability. They will then be re-privatized. They will emerge greatly shrunken, and perhaps broken into smaller units.Nationalization is a misleading word for this process. It would be better to call it forced restructuring by the government, as a pre-emptive safety net. It aims to save citizens from pain, but within the framework of a market economy.Q. What is the major flaw in the view of the Indian leftists with regard to capitalism and socialism?a)They regard socialism as the only theory which benefits the poor and capitalism as the only theory which benefits the rich.b)Their understanding of capitalism is incomplete because they view it as a system antithetical to socialism.c)They view capitalist as a theory which can only work for the rich and not for the poor and an inferior theory when compared with socialism.d)They place the economic theories of capitalism and socialism in water tight compartments and view them as theories completely independent of each other.Correct answer is option 'D'. Can you explain this answer? for CAT 2024 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about Read the following passage and answer the questions that follow.Socialists like Hugo Chavez in Venezuela or Indira Gandhi in India, are famous for nationalizing the largest corporations. But the U.S. government has just taken over three of its biggest corporations within two weeks. Has the United States turned socialist? US right-wingers moan that this is indeed what has happened. Meanwhile, Indian leftists are stunned at nationalizations in a country they view as pitilessly capitalist.Two of the nationalized corporations, Fannie Mae and Freddie Mac, are by far the largest mortgage lenders in the world, with $5 trillion of mortgages and loans on their books. To put that in perspective, that's five times the size of India's GDP. The third corporation, AIG, is the largest insurance company in the world. No nationalization in countries that profess to be socialist has ever been so large.Leftists suspect that the U.S. takeovers are simply aimed at rescuing wealthy shareholders. Not so. The government will acquire 79.9 percent of the shares of these companies at virtually zero cost, pushing the share price down close to zero. So wealthy shareholders have been wiped out, and the bosses of all three corporations have been sacked.This isn't a rescue of the rich. It's a rescue of ordinary people who need mortgages and a functioning housing market which would have collapsed had Fannie Mae and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the entire economy, as happened during the Great Depression of the 1930s.The usual procedure is to let mismanaged companies go bust, penalizing the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it's sensible to have a government takeover before they collapse - even from a capitalist point of view. This is a kind of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn't lose them), and that's vital in a democracy.Does this mean the United States is becoming socialist? Let's distinguish between two meanings of the word. For many people, socialism means state ownership of the means of production, as in the Soviet Union and Mao's China. The U.S. isn't going in that direction. But socialism can also imply an activist state that provides basic needs for all people, and creates a safety net for those hit by misfortune, old age and sickness. The United States has long been socialist in this second sense, and it's becoming more so.Modern capitalist states are all welfare states. Enormous bureaucracies have been created to tax the rich, regulate business, provide subsidies and special schemes to the needy, thwart environmental harm and health hazards, and so on. The list is long and keeps growing.It couldn't be otherwise in a democracy. Contrary to Marx's assumptions, legislators get elected by catering to the masses, even while taking money from corporations. Legislators constantly create new rules and regulations to protect consumers, retirees and other groups of voters. Hence, the United States has become a land of rising red tape. Between 1970 and 2006, the number of pages in the Federal Register (which lists all regulations) shot up from 20,036 to 78,000. The number of regulators in the service of the federal government rose from 90,000 to 241,000. In the first six years of the George W Bush era (2000-2006), the number of pages of regulations increased by over 10,000, and regulators by over 65,000.This is galloping socialism, often criticized as bureaucracy run amok. The U.S. is less welfarist than European countries, but isn't too far behind. U.S. legislators have expanded entitlements for the aged and sick so greatly that state spending on social security, Medicare and Medicaid is projected to rise from 7 percent of GDP today to almost 20 percent by 2020. So much for the myth that the United States is a heartless capitalist ogre. In fact, it combines capitalism with welfarism and often tilts toward the latter when the two conflict.Since US politicians get elected by constantly promising to save citizens from pain, they have now saved citizens from corporate bankruptcies that would threaten the entire economy and throw millions of lives into disarray. This is no more than an extension of the safety-net principle.This is far different from Indira Gandhi's socialism. Her nationalization was aimed at giving the state a stranglehold on industrial production and seizing the commanding heights of the economy. These measures didn't benefit ordinary folk at all.The US takeovers, by contrast, are temporary matters, to be followed by re-privatization once the crisis is resolved. The corporations involved will be obliged to sell chunks of their assets to pay off their debts and attain stability. They will then be re-privatized. They will emerge greatly shrunken, and perhaps broken into smaller units.Nationalization is a misleading word for this process. It would be better to call it forced restructuring by the government, as a pre-emptive safety net. It aims to save citizens from pain, but within the framework of a market economy.Q. What is the major flaw in the view of the Indian leftists with regard to capitalism and socialism?a)They regard socialism as the only theory which benefits the poor and capitalism as the only theory which benefits the rich.b)Their understanding of capitalism is incomplete because they view it as a system antithetical to socialism.c)They view capitalist as a theory which can only work for the rich and not for the poor and an inferior theory when compared with socialism.d)They place the economic theories of capitalism and socialism in water tight compartments and view them as theories completely independent of each other.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the following passage and answer the questions that follow.Socialists like Hugo Chavez in Venezuela or Indira Gandhi in India, are famous for nationalizing the largest corporations. But the U.S. government has just taken over three of its biggest corporations within two weeks. Has the United States turned socialist? US right-wingers moan that this is indeed what has happened. Meanwhile, Indian leftists are stunned at nationalizations in a country they view as pitilessly capitalist.Two of the nationalized corporations, Fannie Mae and Freddie Mac, are by far the largest mortgage lenders in the world, with $5 trillion of mortgages and loans on their books. To put that in perspective, that's five times the size of India's GDP. The third corporation, AIG, is the largest insurance company in the world. No nationalization in countries that profess to be socialist has ever been so large.Leftists suspect that the U.S. takeovers are simply aimed at rescuing wealthy shareholders. Not so. The government will acquire 79.9 percent of the shares of these companies at virtually zero cost, pushing the share price down close to zero. So wealthy shareholders have been wiped out, and the bosses of all three corporations have been sacked.This isn't a rescue of the rich. It's a rescue of ordinary people who need mortgages and a functioning housing market which would have collapsed had Fannie Mae and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the entire economy, as happened during the Great Depression of the 1930s.The usual procedure is to let mismanaged companies go bust, penalizing the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it's sensible to have a government takeover before they collapse - even from a capitalist point of view. This is a kind of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn't lose them), and that's vital in a democracy.Does this mean the United States is becoming socialist? Let's distinguish between two meanings of the word. For many people, socialism means state ownership of the means of production, as in the Soviet Union and Mao's China. The U.S. isn't going in that direction. But socialism can also imply an activist state that provides basic needs for all people, and creates a safety net for those hit by misfortune, old age and sickness. The United States has long been socialist in this second sense, and it's becoming more so.Modern capitalist states are all welfare states. Enormous bureaucracies have been created to tax the rich, regulate business, provide subsidies and special schemes to the needy, thwart environmental harm and health hazards, and so on. The list is long and keeps growing.It couldn't be otherwise in a democracy. Contrary to Marx's assumptions, legislators get elected by catering to the masses, even while taking money from corporations. Legislators constantly create new rules and regulations to protect consumers, retirees and other groups of voters. Hence, the United States has become a land of rising red tape. Between 1970 and 2006, the number of pages in the Federal Register (which lists all regulations) shot up from 20,036 to 78,000. The number of regulators in the service of the federal government rose from 90,000 to 241,000. In the first six years of the George W Bush era (2000-2006), the number of pages of regulations increased by over 10,000, and regulators by over 65,000.This is galloping socialism, often criticized as bureaucracy run amok. The U.S. is less welfarist than European countries, but isn't too far behind. U.S. legislators have expanded entitlements for the aged and sick so greatly that state spending on social security, Medicare and Medicaid is projected to rise from 7 percent of GDP today to almost 20 percent by 2020. So much for the myth that the United States is a heartless capitalist ogre. In fact, it combines capitalism with welfarism and often tilts toward the latter when the two conflict.Since US politicians get elected by constantly promising to save citizens from pain, they have now saved citizens from corporate bankruptcies that would threaten the entire economy and throw millions of lives into disarray. This is no more than an extension of the safety-net principle.This is far different from Indira Gandhi's socialism. Her nationalization was aimed at giving the state a stranglehold on industrial production and seizing the commanding heights of the economy. These measures didn't benefit ordinary folk at all.The US takeovers, by contrast, are temporary matters, to be followed by re-privatization once the crisis is resolved. The corporations involved will be obliged to sell chunks of their assets to pay off their debts and attain stability. They will then be re-privatized. They will emerge greatly shrunken, and perhaps broken into smaller units.Nationalization is a misleading word for this process. It would be better to call it forced restructuring by the government, as a pre-emptive safety net. It aims to save citizens from pain, but within the framework of a market economy.Q. What is the major flaw in the view of the Indian leftists with regard to capitalism and socialism?a)They regard socialism as the only theory which benefits the poor and capitalism as the only theory which benefits the rich.b)Their understanding of capitalism is incomplete because they view it as a system antithetical to socialism.c)They view capitalist as a theory which can only work for the rich and not for the poor and an inferior theory when compared with socialism.d)They place the economic theories of capitalism and socialism in water tight compartments and view them as theories completely independent of each other.Correct answer is option 'D'. Can you explain this answer?.

Solutions for Read the following passage and answer the questions that follow.Socialists like Hugo Chavez in Venezuela or Indira Gandhi in India, are famous for nationalizing the largest corporations. But the U.S. government has just taken over three of its biggest corporations within two weeks. Has the United States turned socialist? US right-wingers moan that this is indeed what has happened. Meanwhile, Indian leftists are stunned at nationalizations in a country they view as pitilessly capitalist.Two of the nationalized corporations, Fannie Mae and Freddie Mac, are by far the largest mortgage lenders in the world, with $5 trillion of mortgages and loans on their books. To put that in perspective, that's five times the size of India's GDP. The third corporation, AIG, is the largest insurance company in the world. No nationalization in countries that profess to be socialist has ever been so large.Leftists suspect that the U.S. takeovers are simply aimed at rescuing wealthy shareholders. Not so. The government will acquire 79.9 percent of the shares of these companies at virtually zero cost, pushing the share price down close to zero. So wealthy shareholders have been wiped out, and the bosses of all three corporations have been sacked.This isn't a rescue of the rich. It's a rescue of ordinary people who need mortgages and a functioning housing market which would have collapsed had Fannie Mae and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the entire economy, as happened during the Great Depression of the 1930s.The usual procedure is to let mismanaged companies go bust, penalizing the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it's sensible to have a government takeover before they collapse - even from a capitalist point of view. This is a kind of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn't lose them), and that's vital in a democracy.Does this mean the United States is becoming socialist? Let's distinguish between two meanings of the word. For many people, socialism means state ownership of the means of production, as in the Soviet Union and Mao's China. The U.S. isn't going in that direction. But socialism can also imply an activist state that provides basic needs for all people, and creates a safety net for those hit by misfortune, old age and sickness. The United States has long been socialist in this second sense, and it's becoming more so.Modern capitalist states are all welfare states. Enormous bureaucracies have been created to tax the rich, regulate business, provide subsidies and special schemes to the needy, thwart environmental harm and health hazards, and so on. The list is long and keeps growing.It couldn't be otherwise in a democracy. Contrary to Marx's assumptions, legislators get elected by catering to the masses, even while taking money from corporations. Legislators constantly create new rules and regulations to protect consumers, retirees and other groups of voters. Hence, the United States has become a land of rising red tape. Between 1970 and 2006, the number of pages in the Federal Register (which lists all regulations) shot up from 20,036 to 78,000. The number of regulators in the service of the federal government rose from 90,000 to 241,000. In the first six years of the George W Bush era (2000-2006), the number of pages of regulations increased by over 10,000, and regulators by over 65,000.This is galloping socialism, often criticized as bureaucracy run amok. The U.S. is less welfarist than European countries, but isn't too far behind. U.S. legislators have expanded entitlements for the aged and sick so greatly that state spending on social security, Medicare and Medicaid is projected to rise from 7 percent of GDP today to almost 20 percent by 2020. So much for the myth that the United States is a heartless capitalist ogre. In fact, it combines capitalism with welfarism and often tilts toward the latter when the two conflict.Since US politicians get elected by constantly promising to save citizens from pain, they have now saved citizens from corporate bankruptcies that would threaten the entire economy and throw millions of lives into disarray. This is no more than an extension of the safety-net principle.This is far different from Indira Gandhi's socialism. Her nationalization was aimed at giving the state a stranglehold on industrial production and seizing the commanding heights of the economy. These measures didn't benefit ordinary folk at all.The US takeovers, by contrast, are temporary matters, to be followed by re-privatization once the crisis is resolved. The corporations involved will be obliged to sell chunks of their assets to pay off their debts and attain stability. They will then be re-privatized. They will emerge greatly shrunken, and perhaps broken into smaller units.Nationalization is a misleading word for this process. It would be better to call it forced restructuring by the government, as a pre-emptive safety net. It aims to save citizens from pain, but within the framework of a market economy.Q. What is the major flaw in the view of the Indian leftists with regard to capitalism and socialism?a)They regard socialism as the only theory which benefits the poor and capitalism as the only theory which benefits the rich.b)Their understanding of capitalism is incomplete because they view it as a system antithetical to socialism.c)They view capitalist as a theory which can only work for the rich and not for the poor and an inferior theory when compared with socialism.d)They place the economic theories of capitalism and socialism in water tight compartments and view them as theories completely independent of each other.Correct answer is option 'D'. 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Here you can find the meaning of Read the following passage and answer the questions that follow.Socialists like Hugo Chavez in Venezuela or Indira Gandhi in India, are famous for nationalizing the largest corporations. But the U.S. government has just taken over three of its biggest corporations within two weeks. Has the United States turned socialist? US right-wingers moan that this is indeed what has happened. Meanwhile, Indian leftists are stunned at nationalizations in a country they view as pitilessly capitalist.Two of the nationalized corporations, Fannie Mae and Freddie Mac, are by far the largest mortgage lenders in the world, with $5 trillion of mortgages and loans on their books. To put that in perspective, that's five times the size of India's GDP. The third corporation, AIG, is the largest insurance company in the world. No nationalization in countries that profess to be socialist has ever been so large.Leftists suspect that the U.S. takeovers are simply aimed at rescuing wealthy shareholders. Not so. The government will acquire 79.9 percent of the shares of these companies at virtually zero cost, pushing the share price down close to zero. So wealthy shareholders have been wiped out, and the bosses of all three corporations have been sacked.This isn't a rescue of the rich. It's a rescue of ordinary people who need mortgages and a functioning housing market which would have collapsed had Fannie Mae and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the entire economy, as happened during the Great Depression of the 1930s.The usual procedure is to let mismanaged companies go bust, penalizing the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it's sensible to have a government takeover before they collapse - even from a capitalist point of view. This is a kind of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn't lose them), and that's vital in a democracy.Does this mean the United States is becoming socialist? Let's distinguish between two meanings of the word. For many people, socialism means state ownership of the means of production, as in the Soviet Union and Mao's China. The U.S. isn't going in that direction. But socialism can also imply an activist state that provides basic needs for all people, and creates a safety net for those hit by misfortune, old age and sickness. The United States has long been socialist in this second sense, and it's becoming more so.Modern capitalist states are all welfare states. Enormous bureaucracies have been created to tax the rich, regulate business, provide subsidies and special schemes to the needy, thwart environmental harm and health hazards, and so on. The list is long and keeps growing.It couldn't be otherwise in a democracy. Contrary to Marx's assumptions, legislators get elected by catering to the masses, even while taking money from corporations. Legislators constantly create new rules and regulations to protect consumers, retirees and other groups of voters. Hence, the United States has become a land of rising red tape. Between 1970 and 2006, the number of pages in the Federal Register (which lists all regulations) shot up from 20,036 to 78,000. The number of regulators in the service of the federal government rose from 90,000 to 241,000. In the first six years of the George W Bush era (2000-2006), the number of pages of regulations increased by over 10,000, and regulators by over 65,000.This is galloping socialism, often criticized as bureaucracy run amok. The U.S. is less welfarist than European countries, but isn't too far behind. U.S. legislators have expanded entitlements for the aged and sick so greatly that state spending on social security, Medicare and Medicaid is projected to rise from 7 percent of GDP today to almost 20 percent by 2020. So much for the myth that the United States is a heartless capitalist ogre. In fact, it combines capitalism with welfarism and often tilts toward the latter when the two conflict.Since US politicians get elected by constantly promising to save citizens from pain, they have now saved citizens from corporate bankruptcies that would threaten the entire economy and throw millions of lives into disarray. This is no more than an extension of the safety-net principle.This is far different from Indira Gandhi's socialism. Her nationalization was aimed at giving the state a stranglehold on industrial production and seizing the commanding heights of the economy. These measures didn't benefit ordinary folk at all.The US takeovers, by contrast, are temporary matters, to be followed by re-privatization once the crisis is resolved. The corporations involved will be obliged to sell chunks of their assets to pay off their debts and attain stability. They will then be re-privatized. They will emerge greatly shrunken, and perhaps broken into smaller units.Nationalization is a misleading word for this process. It would be better to call it forced restructuring by the government, as a pre-emptive safety net. It aims to save citizens from pain, but within the framework of a market economy.Q. What is the major flaw in the view of the Indian leftists with regard to capitalism and socialism?a)They regard socialism as the only theory which benefits the poor and capitalism as the only theory which benefits the rich.b)Their understanding of capitalism is incomplete because they view it as a system antithetical to socialism.c)They view capitalist as a theory which can only work for the rich and not for the poor and an inferior theory when compared with socialism.d)They place the economic theories of capitalism and socialism in water tight compartments and view them as theories completely independent of each other.Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Read the following passage and answer the questions that follow.Socialists like Hugo Chavez in Venezuela or Indira Gandhi in India, are famous for nationalizing the largest corporations. But the U.S. government has just taken over three of its biggest corporations within two weeks. Has the United States turned socialist? US right-wingers moan that this is indeed what has happened. Meanwhile, Indian leftists are stunned at nationalizations in a country they view as pitilessly capitalist.Two of the nationalized corporations, Fannie Mae and Freddie Mac, are by far the largest mortgage lenders in the world, with $5 trillion of mortgages and loans on their books. To put that in perspective, that's five times the size of India's GDP. The third corporation, AIG, is the largest insurance company in the world. No nationalization in countries that profess to be socialist has ever been so large.Leftists suspect that the U.S. takeovers are simply aimed at rescuing wealthy shareholders. Not so. The government will acquire 79.9 percent of the shares of these companies at virtually zero cost, pushing the share price down close to zero. So wealthy shareholders have been wiped out, and the bosses of all three corporations have been sacked.This isn't a rescue of the rich. It's a rescue of ordinary people who need mortgages and a functioning housing market which would have collapsed had Fannie Mae and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the entire economy, as happened during the Great Depression of the 1930s.The usual procedure is to let mismanaged companies go bust, penalizing the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it's sensible to have a government takeover before they collapse - even from a capitalist point of view. This is a kind of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn't lose them), and that's vital in a democracy.Does this mean the United States is becoming socialist? Let's distinguish between two meanings of the word. For many people, socialism means state ownership of the means of production, as in the Soviet Union and Mao's China. The U.S. isn't going in that direction. But socialism can also imply an activist state that provides basic needs for all people, and creates a safety net for those hit by misfortune, old age and sickness. The United States has long been socialist in this second sense, and it's becoming more so.Modern capitalist states are all welfare states. Enormous bureaucracies have been created to tax the rich, regulate business, provide subsidies and special schemes to the needy, thwart environmental harm and health hazards, and so on. The list is long and keeps growing.It couldn't be otherwise in a democracy. Contrary to Marx's assumptions, legislators get elected by catering to the masses, even while taking money from corporations. Legislators constantly create new rules and regulations to protect consumers, retirees and other groups of voters. Hence, the United States has become a land of rising red tape. Between 1970 and 2006, the number of pages in the Federal Register (which lists all regulations) shot up from 20,036 to 78,000. The number of regulators in the service of the federal government rose from 90,000 to 241,000. In the first six years of the George W Bush era (2000-2006), the number of pages of regulations increased by over 10,000, and regulators by over 65,000.This is galloping socialism, often criticized as bureaucracy run amok. The U.S. is less welfarist than European countries, but isn't too far behind. U.S. legislators have expanded entitlements for the aged and sick so greatly that state spending on social security, Medicare and Medicaid is projected to rise from 7 percent of GDP today to almost 20 percent by 2020. So much for the myth that the United States is a heartless capitalist ogre. In fact, it combines capitalism with welfarism and often tilts toward the latter when the two conflict.Since US politicians get elected by constantly promising to save citizens from pain, they have now saved citizens from corporate bankruptcies that would threaten the entire economy and throw millions of lives into disarray. This is no more than an extension of the safety-net principle.This is far different from Indira Gandhi's socialism. Her nationalization was aimed at giving the state a stranglehold on industrial production and seizing the commanding heights of the economy. These measures didn't benefit ordinary folk at all.The US takeovers, by contrast, are temporary matters, to be followed by re-privatization once the crisis is resolved. The corporations involved will be obliged to sell chunks of their assets to pay off their debts and attain stability. They will then be re-privatized. They will emerge greatly shrunken, and perhaps broken into smaller units.Nationalization is a misleading word for this process. It would be better to call it forced restructuring by the government, as a pre-emptive safety net. It aims to save citizens from pain, but within the framework of a market economy.Q. What is the major flaw in the view of the Indian leftists with regard to capitalism and socialism?a)They regard socialism as the only theory which benefits the poor and capitalism as the only theory which benefits the rich.b)Their understanding of capitalism is incomplete because they view it as a system antithetical to socialism.c)They view capitalist as a theory which can only work for the rich and not for the poor and an inferior theory when compared with socialism.d)They place the economic theories of capitalism and socialism in water tight compartments and view them as theories completely independent of each other.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for Read the following passage and answer the questions that follow.Socialists like Hugo Chavez in Venezuela or Indira Gandhi in India, are famous for nationalizing the largest corporations. But the U.S. government has just taken over three of its biggest corporations within two weeks. Has the United States turned socialist? US right-wingers moan that this is indeed what has happened. Meanwhile, Indian leftists are stunned at nationalizations in a country they view as pitilessly capitalist.Two of the nationalized corporations, Fannie Mae and Freddie Mac, are by far the largest mortgage lenders in the world, with $5 trillion of mortgages and loans on their books. To put that in perspective, that's five times the size of India's GDP. The third corporation, AIG, is the largest insurance company in the world. No nationalization in countries that profess to be socialist has ever been so large.Leftists suspect that the U.S. takeovers are simply aimed at rescuing wealthy shareholders. Not so. The government will acquire 79.9 percent of the shares of these companies at virtually zero cost, pushing the share price down close to zero. So wealthy shareholders have been wiped out, and the bosses of all three corporations have been sacked.This isn't a rescue of the rich. It's a rescue of ordinary people who need mortgages and a functioning housing market which would have collapsed had Fannie Mae and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the entire economy, as happened during the Great Depression of the 1930s.The usual procedure is to let mismanaged companies go bust, penalizing the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it's sensible to have a government takeover before they collapse - even from a capitalist point of view. This is a kind of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn't lose them), and that's vital in a democracy.Does this mean the United States is becoming socialist? Let's distinguish between two meanings of the word. For many people, socialism means state ownership of the means of production, as in the Soviet Union and Mao's China. The U.S. isn't going in that direction. But socialism can also imply an activist state that provides basic needs for all people, and creates a safety net for those hit by misfortune, old age and sickness. The United States has long been socialist in this second sense, and it's becoming more so.Modern capitalist states are all welfare states. Enormous bureaucracies have been created to tax the rich, regulate business, provide subsidies and special schemes to the needy, thwart environmental harm and health hazards, and so on. The list is long and keeps growing.It couldn't be otherwise in a democracy. Contrary to Marx's assumptions, legislators get elected by catering to the masses, even while taking money from corporations. Legislators constantly create new rules and regulations to protect consumers, retirees and other groups of voters. Hence, the United States has become a land of rising red tape. Between 1970 and 2006, the number of pages in the Federal Register (which lists all regulations) shot up from 20,036 to 78,000. The number of regulators in the service of the federal government rose from 90,000 to 241,000. In the first six years of the George W Bush era (2000-2006), the number of pages of regulations increased by over 10,000, and regulators by over 65,000.This is galloping socialism, often criticized as bureaucracy run amok. The U.S. is less welfarist than European countries, but isn't too far behind. U.S. legislators have expanded entitlements for the aged and sick so greatly that state spending on social security, Medicare and Medicaid is projected to rise from 7 percent of GDP today to almost 20 percent by 2020. So much for the myth that the United States is a heartless capitalist ogre. In fact, it combines capitalism with welfarism and often tilts toward the latter when the two conflict.Since US politicians get elected by constantly promising to save citizens from pain, they have now saved citizens from corporate bankruptcies that would threaten the entire economy and throw millions of lives into disarray. This is no more than an extension of the safety-net principle.This is far different from Indira Gandhi's socialism. Her nationalization was aimed at giving the state a stranglehold on industrial production and seizing the commanding heights of the economy. These measures didn't benefit ordinary folk at all.The US takeovers, by contrast, are temporary matters, to be followed by re-privatization once the crisis is resolved. The corporations involved will be obliged to sell chunks of their assets to pay off their debts and attain stability. They will then be re-privatized. They will emerge greatly shrunken, and perhaps broken into smaller units.Nationalization is a misleading word for this process. It would be better to call it forced restructuring by the government, as a pre-emptive safety net. It aims to save citizens from pain, but within the framework of a market economy.Q. What is the major flaw in the view of the Indian leftists with regard to capitalism and socialism?a)They regard socialism as the only theory which benefits the poor and capitalism as the only theory which benefits the rich.b)Their understanding of capitalism is incomplete because they view it as a system antithetical to socialism.c)They view capitalist as a theory which can only work for the rich and not for the poor and an inferior theory when compared with socialism.d)They place the economic theories of capitalism and socialism in water tight compartments and view them as theories completely independent of each other.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of Read the following passage and answer the questions that follow.Socialists like Hugo Chavez in Venezuela or Indira Gandhi in India, are famous for nationalizing the largest corporations. But the U.S. government has just taken over three of its biggest corporations within two weeks. Has the United States turned socialist? US right-wingers moan that this is indeed what has happened. Meanwhile, Indian leftists are stunned at nationalizations in a country they view as pitilessly capitalist.Two of the nationalized corporations, Fannie Mae and Freddie Mac, are by far the largest mortgage lenders in the world, with $5 trillion of mortgages and loans on their books. To put that in perspective, that's five times the size of India's GDP. The third corporation, AIG, is the largest insurance company in the world. No nationalization in countries that profess to be socialist has ever been so large.Leftists suspect that the U.S. takeovers are simply aimed at rescuing wealthy shareholders. Not so. The government will acquire 79.9 percent of the shares of these companies at virtually zero cost, pushing the share price down close to zero. So wealthy shareholders have been wiped out, and the bosses of all three corporations have been sacked.This isn't a rescue of the rich. It's a rescue of ordinary people who need mortgages and a functioning housing market which would have collapsed had Fannie Mae and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the entire economy, as happened during the Great Depression of the 1930s.The usual procedure is to let mismanaged companies go bust, penalizing the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it's sensible to have a government takeover before they collapse - even from a capitalist point of view. This is a kind of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn't lose them), and that's vital in a democracy.Does this mean the United States is becoming socialist? Let's distinguish between two meanings of the word. For many people, socialism means state ownership of the means of production, as in the Soviet Union and Mao's China. The U.S. isn't going in that direction. But socialism can also imply an activist state that provides basic needs for all people, and creates a safety net for those hit by misfortune, old age and sickness. The United States has long been socialist in this second sense, and it's becoming more so.Modern capitalist states are all welfare states. Enormous bureaucracies have been created to tax the rich, regulate business, provide subsidies and special schemes to the needy, thwart environmental harm and health hazards, and so on. The list is long and keeps growing.It couldn't be otherwise in a democracy. Contrary to Marx's assumptions, legislators get elected by catering to the masses, even while taking money from corporations. Legislators constantly create new rules and regulations to protect consumers, retirees and other groups of voters. Hence, the United States has become a land of rising red tape. Between 1970 and 2006, the number of pages in the Federal Register (which lists all regulations) shot up from 20,036 to 78,000. The number of regulators in the service of the federal government rose from 90,000 to 241,000. In the first six years of the George W Bush era (2000-2006), the number of pages of regulations increased by over 10,000, and regulators by over 65,000.This is galloping socialism, often criticized as bureaucracy run amok. The U.S. is less welfarist than European countries, but isn't too far behind. U.S. legislators have expanded entitlements for the aged and sick so greatly that state spending on social security, Medicare and Medicaid is projected to rise from 7 percent of GDP today to almost 20 percent by 2020. So much for the myth that the United States is a heartless capitalist ogre. In fact, it combines capitalism with welfarism and often tilts toward the latter when the two conflict.Since US politicians get elected by constantly promising to save citizens from pain, they have now saved citizens from corporate bankruptcies that would threaten the entire economy and throw millions of lives into disarray. This is no more than an extension of the safety-net principle.This is far different from Indira Gandhi's socialism. Her nationalization was aimed at giving the state a stranglehold on industrial production and seizing the commanding heights of the economy. These measures didn't benefit ordinary folk at all.The US takeovers, by contrast, are temporary matters, to be followed by re-privatization once the crisis is resolved. The corporations involved will be obliged to sell chunks of their assets to pay off their debts and attain stability. They will then be re-privatized. They will emerge greatly shrunken, and perhaps broken into smaller units.Nationalization is a misleading word for this process. It would be better to call it forced restructuring by the government, as a pre-emptive safety net. It aims to save citizens from pain, but within the framework of a market economy.Q. What is the major flaw in the view of the Indian leftists with regard to capitalism and socialism?a)They regard socialism as the only theory which benefits the poor and capitalism as the only theory which benefits the rich.b)Their understanding of capitalism is incomplete because they view it as a system antithetical to socialism.c)They view capitalist as a theory which can only work for the rich and not for the poor and an inferior theory when compared with socialism.d)They place the economic theories of capitalism and socialism in water tight compartments and view them as theories completely independent of each other.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Read the following passage and answer the questions that follow.Socialists like Hugo Chavez in Venezuela or Indira Gandhi in India, are famous for nationalizing the largest corporations. But the U.S. government has just taken over three of its biggest corporations within two weeks. Has the United States turned socialist? US right-wingers moan that this is indeed what has happened. Meanwhile, Indian leftists are stunned at nationalizations in a country they view as pitilessly capitalist.Two of the nationalized corporations, Fannie Mae and Freddie Mac, are by far the largest mortgage lenders in the world, with $5 trillion of mortgages and loans on their books. To put that in perspective, that's five times the size of India's GDP. The third corporation, AIG, is the largest insurance company in the world. No nationalization in countries that profess to be socialist has ever been so large.Leftists suspect that the U.S. takeovers are simply aimed at rescuing wealthy shareholders. Not so. The government will acquire 79.9 percent of the shares of these companies at virtually zero cost, pushing the share price down close to zero. So wealthy shareholders have been wiped out, and the bosses of all three corporations have been sacked.This isn't a rescue of the rich. It's a rescue of ordinary people who need mortgages and a functioning housing market which would have collapsed had Fannie Mae and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the entire economy, as happened during the Great Depression of the 1930s.The usual procedure is to let mismanaged companies go bust, penalizing the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it's sensible to have a government takeover before they collapse - even from a capitalist point of view. This is a kind of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn't lose them), and that's vital in a democracy.Does this mean the United States is becoming socialist? Let's distinguish between two meanings of the word. For many people, socialism means state ownership of the means of production, as in the Soviet Union and Mao's China. The U.S. isn't going in that direction. But socialism can also imply an activist state that provides basic needs for all people, and creates a safety net for those hit by misfortune, old age and sickness. The United States has long been socialist in this second sense, and it's becoming more so.Modern capitalist states are all welfare states. Enormous bureaucracies have been created to tax the rich, regulate business, provide subsidies and special schemes to the needy, thwart environmental harm and health hazards, and so on. The list is long and keeps growing.It couldn't be otherwise in a democracy. Contrary to Marx's assumptions, legislators get elected by catering to the masses, even while taking money from corporations. Legislators constantly create new rules and regulations to protect consumers, retirees and other groups of voters. Hence, the United States has become a land of rising red tape. Between 1970 and 2006, the number of pages in the Federal Register (which lists all regulations) shot up from 20,036 to 78,000. The number of regulators in the service of the federal government rose from 90,000 to 241,000. In the first six years of the George W Bush era (2000-2006), the number of pages of regulations increased by over 10,000, and regulators by over 65,000.This is galloping socialism, often criticized as bureaucracy run amok. The U.S. is less welfarist than European countries, but isn't too far behind. U.S. legislators have expanded entitlements for the aged and sick so greatly that state spending on social security, Medicare and Medicaid is projected to rise from 7 percent of GDP today to almost 20 percent by 2020. So much for the myth that the United States is a heartless capitalist ogre. In fact, it combines capitalism with welfarism and often tilts toward the latter when the two conflict.Since US politicians get elected by constantly promising to save citizens from pain, they have now saved citizens from corporate bankruptcies that would threaten the entire economy and throw millions of lives into disarray. This is no more than an extension of the safety-net principle.This is far different from Indira Gandhi's socialism. Her nationalization was aimed at giving the state a stranglehold on industrial production and seizing the commanding heights of the economy. These measures didn't benefit ordinary folk at all.The US takeovers, by contrast, are temporary matters, to be followed by re-privatization once the crisis is resolved. The corporations involved will be obliged to sell chunks of their assets to pay off their debts and attain stability. They will then be re-privatized. They will emerge greatly shrunken, and perhaps broken into smaller units.Nationalization is a misleading word for this process. It would be better to call it forced restructuring by the government, as a pre-emptive safety net. It aims to save citizens from pain, but within the framework of a market economy.Q. What is the major flaw in the view of the Indian leftists with regard to capitalism and socialism?a)They regard socialism as the only theory which benefits the poor and capitalism as the only theory which benefits the rich.b)Their understanding of capitalism is incomplete because they view it as a system antithetical to socialism.c)They view capitalist as a theory which can only work for the rich and not for the poor and an inferior theory when compared with socialism.d)They place the economic theories of capitalism and socialism in water tight compartments and view them as theories completely independent of each other.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CAT tests.