ECONOMICS (Assessment No. 1.5) - MERCANTILISM

By the close of the Middle Ages, which economic system began to decay?

• Feudalism
• Capitalism
• Socialism
• Communism

What were young states primarily preoccupied with during the emergence of nation-states?

• Economic equality
• Religious freedom
• National security and progress
• Environmental conservation

What were the two main tasks that required the service of men and money for the young states?

• Education and healthcare
• Great armies and the support of monarchs
• Agricultural development and trade
• Cultural and scientific advancements

Why was higher taxation not favorably received by the people?

• They preferred barter trade
• They did not value money
• It imposed a financial burden
• It was against their religious beliefs

What economic system became prevalent in Europe behind the backdrop of state reform?

• Socialism
• Mercantilism
• Communism
• Feudalism

What was one of the underlying principles of mercantilism?

• Possession of a large amount of precious metals
• Redistribution of wealth
• Elimination of foreign trade
• Privatization of industries

Why were manufacturing industries encouraged under mercantilism?

• To reduce pollution
• To increase domestic consumption
• Their products were in great demand abroad
• To decrease the labor force

What was the desired net result of selling products abroad under mercantilism?

• Expansion of territorial boundaries
• Improvement of local infrastructure
• Reduction in domestic prices
• Net influx of bullion (silver and gold)

Why was bullion (silver and gold) desired under mercantilism?

• It stimulated commerce through increased monetary circulation
• It could be used to pay off national debt
• It symbolized cultural wealth
• It was needed for religious ceremonies

Why was overseas trade necessary under mercantilism?

• No state was self-sufficient
• To spread religious beliefs
• To improve diplomatic relations
• To reduce domestic production