ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They could get as much gold and silver as they could
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They could sell more goods than what they buy
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Either A or B
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None of the above
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Detailed explanation-1: -Mercantilism was a form of economic nationalism that sought to increase the prosperity and power of a nation through restrictive trade practices. Its goal was to increase the supply of a state’s gold and silver with exports rather than to deplete it through imports. It also sought to support domestic employment.
Detailed explanation-2: -Market economies are essential to developing national wealth because they allow for trade and entrepreneurship. Trade and entrepreneurship create higher national gross domestic product and promote economic creativity to obtain wealth.
Detailed explanation-3: -Policies that encourage savings, and therefore investment in capital, lead to higher economic growth. Similarly, policies that encourage technological change, such as tax credits for research and development, also lead to more economic growth.
Detailed explanation-4: -Smith argued that the free-market system along with free trade would produce true national wealth, benefiting all social classes, not just the privileged few.
Detailed explanation-5: -In our modern world, the three main factors that determine a country’s wealth are institution, culture and geography. Rich countries have very good institutions while poor countries have extremely devastating ones.