7-1.3: Mercantilism

According to mercantilism, what was one advantage for nations that had colonies?

• They had a place to relocate undesirable citizens

• They had markets for goods manufactured in Europe

• They had a constant source of wealth in the form of gold and silver

• They had a source of slave labor for their factories

What was an essential aspect of the economic theory of mercantilism?

• free trade

• capitalism

• colonies

• paper currency

What was the main idea behind mercantilism?

• Colonies existed to make a profit for their mother country

• Colonies were used to house prisoners from the mother country

• Colonies were allowed to do whatever they wanted

• Colonies were setup to help with overpopulation in the mother country

What important resource motivated Europeans to setup colonies?

• manufactured goods

• effective governments

• new technologies

• raw materials

How did European countries discourage imports of foreign goods to promote mercantilism?

• They placed tariffs on exports

• They placed tariffs on imports

• They forbid the sale of foreign goods in their country

• They spread lies about the quality of foreign goods

What is a favorable balance of trade?

• A nation has more exports than imports

• A nation has more imports than exports

• A nation's imports and exports are equal

• A nation has more trade than their neighbor

How did European countries control trade with their colonies under mercantilism?

• European nations sold raw materials to their colonies

• European nations bought finished goods from their colonies

• European nations required that colonies only trade with the mother country

• European nations did not tax goods from other countries

What economic system is depicted in this diagram?

• capitalism

• communism

• mercantilism

• socialism

How did the colonization of the New World help bring an end to feudalism?

• It created a negative balance of trade in Europe

• It put greater importance upon the noble class

• It inspired many peasants to move to the New World

• It made the definition of land ownership more complex

What caused economies in Europe to become more complex after the discovery of the New World?

• the start of a global war

• the outbreak of the Black Death

• the growth of international trade

• the expansion of the feudal system