What is a key feature of Mercantilism as an economic theory?

What is a key feature of Mercantilism as an economic theory?

• A. Encourages free trade.
• B. Supports resource conservation.
• C. Aims for a favorable balance of trade.
• D. Enhances international cooperation.

Answer: (C)

Mercantilism is an economic theory that emerged in the 16th to 18th centuries, focusing primarily on the accumulation of wealth through trade. A key feature of this theory is the aim for a favorable balance of trade. This means that a country should export more than it imports, thereby bringing in more money than it spends. By achieving a surplus in trade, nations believed they could increase their wealth and power, as well as expand their empires. This emphasis on exports over imports directly contrasts with the principles of free trade, where the focus is on allowing market forces to dictate trade flows without government intervention. Additionally, while resource conservation is important in various economic approaches, it is not a central concept of mercantilism. Lastly, international cooperation is not a characteristic of mercantilism, as the theory often promotes competition among nations for resources and markets rather than collaboration. The desire for a favorable balance of trade thus remains a cornerstone of the mercantilist approach to economics.

Mercantilism is an economic theory that emerged in the 16th to 18th centuries, focusing primarily on the accumulation of wealth through trade. A key feature of this theory is the aim for a favorable balance of trade. This means that a country should export more than it imports, thereby bringing in more money than it spends. By achieving a surplus in trade, nations believed they could increase their wealth and power, as well as expand their empires.

This emphasis on exports over imports directly contrasts with the principles of free trade, where the focus is on allowing market forces to dictate trade flows without government intervention. Additionally, while resource conservation is important in various economic approaches, it is not a central concept of mercantilism. Lastly, international cooperation is not a characteristic of mercantilism, as the theory often promotes competition among nations for resources and markets rather than collaboration. The desire for a favorable balance of trade thus remains a cornerstone of the mercantilist approach to economics.