7-1.3,4 Mercantilism & Capitalism

What defines a favorable balance of trade?

• The nation only imports goods and does not export.

• The nation only exports the same value as its imports.

• The value of a nation's exports is more than the value of its imports.

• The value of a nation's imports is more than the value of its exports.

What was a long-term advantage for European nations that had colonies?

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

• They had a source of slave labor for factories in the mother country.

• They had markets for goods manufactured in Europe.

• They had a place to relocate undesirable citizens.

During the Colonial Era, why did European powers strive for a favorable balance of trade?

• to compete against their colonies for markets

• to show that their products were better than those made in the colonies

• to gain gold and silver and become more powerful

• to gain many different types of weapons in case of war

What is the main reason nations that practiced mercantilism wanted colonies?

• Colonies provided armies to defend the mother country.

• Colonies eased overcrowding by taking in people from the mother country.

• Colonies developed new technology for merchants to sell.

• Colonies provided raw materials and markets for new goods.

How did European nations ensure that they maintained a favorable balance of trade during the 1700s?

• They banned all trade between the separate European colonies.

• They controlled what was traded out of their colonies and the prices.

• They refused to use currencies that had values based on gold.

• They limited the amounts of labor not done by African slaves.

What is the defining characteristic of capitalism?

• government ownership of all markets

• private ownership of resources and production

• exploitation of slave labor

• development of foreign markets

The rise of the middle class and the creation of private businesses led to what kind of economic system?

• command economy

• barter economy

• market economy

• natural economy

Someone who supports capitalism as an economic system would agree with which statement?

• Governments should control gold and silver to help the poor.

• Businesses should be owned by the government.

• Businesses should be privately owned by citizens.

• Governments should pass laws to keep trade fair.

What social class of people expanded due to the rise of the market economy in Europe?

• farmers

• merchants

• Slaves

• Soldiers

In a true capitalist system, which group has the power to control the economy?

• the government

• producers and consumers

• the military

• elected and appointed officials