mercantilism
Definition
Mercantilism is an economic theory that emphasizes the importance of accumulating monetary reserves through a positive balance of trade, especially of finished goods. It advocates for a strong governmental involvement in the economy to protect and enhance national wealth.
Analogy
Imagine playing a strategic board game where your goal is to accumulate as many resources as possible to build your empire while restricting your opponents from doing the same. In this game, you're making rules (trade policies) that benefit your growth and protect your resources (wealth), much like mercantilism advocates for managing an economy.
Related terms
Balance of Trade: The difference in value between a country's imports and exports over a certain period.
Protectionism: An economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow fair competition between imports and goods and services produced domestically.
National Wealth: The total value of all financial assets owned by a nation, including natural resources, capital goods, and human capital
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