Mercantilism is an economic theory based on which principle?

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Study for the Honors World History Exam. Focus on important historical events and eras with multiple choice questions, detailed explanations, and expert hints. Prepare confidently and excel in your exam!

Multiple Choice

Mercantilism is an economic theory based on which principle?

Explanation:
Mercantilism rests on the idea that a nation's wealth determines its power. Governments pursue wealth by amassing gold and silver and by keeping a favorable balance of trade—encouraging exports while restricting imports—through tariffs, subsidies, and colonial control. This view treats the economy as a tool of national strength, requiring active state intervention to build economic resources and military capability. It’s not about free trade without government involvement, it isn’t rooted in cultural superiority, and it isn’t about security gained from military power alone—those describe different approaches to policy.

Mercantilism rests on the idea that a nation's wealth determines its power. Governments pursue wealth by amassing gold and silver and by keeping a favorable balance of trade—encouraging exports while restricting imports—through tariffs, subsidies, and colonial control. This view treats the economy as a tool of national strength, requiring active state intervention to build economic resources and military capability. It’s not about free trade without government involvement, it isn’t rooted in cultural superiority, and it isn’t about security gained from military power alone—those describe different approaches to policy.

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