Which of the following best describes mercantilism?
Mercantilism is an economic policy and theory that emerged in the 16th century and lasted until the late 18th century. It is often associated with the early modern European states, especially Britain and France.
Mercantilism is best described as a system that emphasizes the accumulation of wealth and power through trade and commerce. It promotes the belief that a nation's economic strength is derived from exporting more than it imports, thereby generating a favorable balance of trade. This theory is closely linked with colonialism and imperialism, as it encouraged the acquisition and exploitation of colonies to secure resources and markets for the mother country.
Practically, mercantilism was characterized by government intervention and regulation in the economy. Governments implemented protective tariffs, subsidies, and monopolies to promote domestic industries and protect them from foreign competition. They also imposed restrictions on imports and encouraged exports through policies like export subsidies.
Overall, mercantilism aimed to create a strong and self-sufficient nation by prioritizing economic interests and generating a positive trade balance, often at the expense of other nations. It laid the foundation for later economic theories such as capitalism and free trade.