The economic policy that promoted a self-sufficient state with tariffs and regulation of trade is known as which of the following?

• A. Mercantilism
• B. Capitalism
• C. Socialism
• D. Feudalism

Answer: (A)

Mercantilism is an economic policy that promotes a self-sufficient state by aggressively regulating trade and using tariffs to protect domestic industries and maximize exports. The idea is that a country's wealth comes from accumulating precious metals, so governments seek a favorable balance of trade, limit imports, and build colonies or sources of raw materials to support the homeland. Tariffs raise the cost of foreign goods, encouraging domestic production and reducing competition, while trade rules, monopolies, and navigation acts steer economic activity toward national interests. This approach contrasts with capitalism, which centers on private free markets and voluntary exchange; socialism, which emphasizes collective ownership or centralized planning; and feudalism, a medieval system organized around land tenure and lord–vassal relationships rather than state-directed trade policy.