Mercantilism 

Mercantilism - a favorable balance of trade

• Economists in the 16th to the 18th century believed a country’s power cae from the size of its wealth

• A country would do everything possible to acquire more gold, preferably at the expense of its rivals

• A mercantilist country could increase its wealth and power in 2 ways.

  • establishing and exploiting colonies
  • it could establish favorable balance of trade

• Wealth allowed nations to build strong navies and purchase vital goods

• The goal of every nation was to attain as much gold as possible

  favorable balance of trade - When a country is selling more goods than it buys

• A nations ultimate goal under mercantilism was to become self-sufficient

• Colonies provided raw materials that could not be found in the home country as wells as gold, and %%markets and goods to support trade%%