The theory of mercantilism holds that a nation's economic power comes from a __________.
Responses
A enslave peopleenslave people
B become industrialbecome industrial
C willingness to explorewillingness to explore
D favorable balance of trade
D favorable balance of trade
The theory of mercantilism holds that a nation's economic power comes from a favorable balance of trade.
The theory of mercantilism holds that a nation's economic power comes from a favorable balance of trade. To understand this concept, let's break it down:
1. Start by understanding what mercantilism is: Mercantilism was an economic theory popular in the 16th to 18th centuries that emphasized the accumulation of wealth and power for nations through trade and commercial activities.
2. Now, define a favorable balance of trade: A favorable balance of trade occurs when a nation exports (sells) more goods and services than it imports (buys). This leads to a surplus in trade, where the nation receives more income from exports than it spends on imports.
3. Understand why a favorable balance of trade is important: In the theory of mercantilism, a favorable balance of trade is seen as a key component of a nation's economic power. It is believed that by exporting more than importing, a nation accumulates wealth in the form of gold and silver reserves. This accumulation of precious metals was considered a measure of a nation's economic strength during the mercantilist era.
Therefore, the correct answer is D) favorable balance of trade, as per the theory of mercantilism.