CHAPTER 2

Mercantilists believed that:

• Trade can only benefit a country at the expense of another country

• Trade can benefit for 2 countries

• Trade can only benefit a country from export good from another country

• None of the above

Based on Mercantilist thinking, governments should

• subsidize and encourage exports

• Dubsidize and encourage imports

• Subsidize and encourage imports, exports

• None of the above

Which of the following is NOT consistent with the central beliefs of Mercantilism?

• Government should intervene to achieve a surplus in the balance of trade

• Policies should be put in place to minimize exports and maximize imports

• Imports should be limited by tariffs and quotas

• Exports should be subsidized

The Mercantilists believed in:

• Running trade surplus

• Subsidize and encourage imports

• The wealth of countries is military

• None of the above

Which of the following statements most accurately captures the main tenet of Mercantilism?

• It is in a country's best interests to not export products to less developed countries

• It is in a country's best interests to import products even if they are most efficiently produced at home

• It is in a country's best interests to import less specialized goods than to attempt to make them at home

• It is in a country's best interests to maintain a trade surplus

Which of the following is NOT true about Mercantilism?

• Domestic producers were often hurt by mercantilism

• Under mercantilism, exports were encouraged and imports were discouraged

• Mercantilists believed that one country's gains from trade came at the expense of another country or countries' well-being

• Mercantilism focused on the accumulation of gold from trade payments

The Mercantilists did not advocate:

• The accumulation of gold by the nation

• free trade

• restricting the nation's imports

• stimulating the nation's exports

The Mercantilists would have objected to

• Export promotion policies initiated by the government

• The use of tariffs or quotas to restrict imports

• Trade policies designed to accumulate gold and other precious metal

• International trade based on open markets

The flaw with Mercantilism was that it viewd trade as a

• zero-sum game

• economic necessity

• non essential economic activity

• threat to a government's independence

Trade is a zero-sum game. This is mostly in the line with ......?

• Adam Smith

• The mercantilists' view on trade

• Stolper - Samuelsson

• Absolute advantages