Mercantilism
Definition
Mercantilism is an economic theory that trade generates wealth and is stimulated by the accumulation of profitable balances, which a government should encourage by means of protectionism.
Analogy
Imagine you're playing a game where the goal is to collect as many gold coins as possible. You want to get more coins (exports) than you give away (imports), so you create rules that favor your own team. That's essentially what countries were doing with mercantilism.
Related terms
Protectionism: The theory or practice of shielding a country's domestic industries from foreign competition by taxing imports.
Balance of Trade: The difference in value between a country's imports and exports over a certain period.
Economic Nationalism: Policies and beliefs designed to protect and stimulate a nation’s economy, often involving protectionist measures.
"Mercantilism" appears in:
Study guides (5)
AP European History - 1.8 Columbian Exchange
AP European History - 3.4 Economic Development and Mercantilism
AP European History - 3.8 Comparison in the Age of Absolutism and Constitutionalism
AP European History - 4.7 Causation in the Age of the Scientific Revolution
AP European History - 5.2 The Rise of Global Markets
Practice Questions (20+)
- Which of the following best describes the economic system of mercantilism?
- What role did mercantilism developed during Italian Renaissance play in shaping economic policies of early modern European states?
- How did mercantilism influence colonization efforts by various European nations?
- What might have been a probable outcome if Spain had not pursued an aggressive policy of mercantilism in the 16th and 17th centuries?
- How did the economic system of Mercantilism tie into Europe's exploitation of resources during Columbian Exchange?
- From a Marxist perspective, how did the development of mercantilism during the 16th and 17th centuries deepen class divisions in European societies?
- How did mercantilism shape economic practices in Europe during the Age of Exploration?
- Who initiated a policy of mercantilism for France in the late 17th century?
- What was a significant effect of mercantilism on Europe's economy between 1648-1815?
- What impact did Commercial Revolution have on mercantilism during this period?
- Which of the following best defines mercantilism as it was practiced in 17th century Europe?
- Who is considered as the main theorist behind mercantilism?
- Who is associated with the theory of laissez-faire economics which directly challenged the concept of mercantilism?
- Which English monarch is recognized for implementing policies that promoted mercantilism?
- Which French finance minister is most associated with the system of mercantilism?
- What was the primary goal of mercantilism during the Age of Exploration?
- What was an effect of mercantilism on mother countries during the Age of Exploration?
- Which country's navigation acts can be seen as an example of mercantilism?
- Which group would have been most opposed to the principles of mercantilism during the early modern era?
- Which economic system succeeded mercantilism in the late 18th century?
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