Texes Social Studies Practice Exam 2025 – Complete Test Prep Guide

The economic policy that emphasized minimal government intervention during the 1920s is Laissez-faire. This approach advocates for a free-market economy where businesses operate with little to no government interference, allowing the laws of supply and demand to dictate economic outcomes. During the 1920s, often referred to as the "Roaring Twenties," this policy was prevalent as the United States experienced significant economic growth and innovation, with an emphasis on individual entrepreneurship and minimal restrictions on business activities.

Laissez-faire was characterized by a belief in the self-regulating nature of the market, suggesting that prosperity would flow more freely when the government did not impose regulations or controls on economic activities. This period saw the rise of consumerism, increased production, and a booming stock market, all fostered by the absence of stringent governmental oversight.

Other options such as Keynesian economics focus on increased government intervention to manage economic cycles, monetarism emphasizes the role of governments in controlling the amount of money in circulation, and Progressivism includes reforms aimed at addressing social issues and regulating business practices. These approaches contrast significantly with the laissez-faire philosophy that dominated the 1920s economic landscape.