ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The economic theory that trade generates dept
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A democratic theory that trade generates wealth
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The economic theory that trade generates wealth
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A democratic theory that trade generates dept
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Detailed explanation-1: -Mercantilism is an economic theory that advocates government regulation of international trade to generate wealth and strengthen national power. Merchants and the government work together to reduce the trade deficit and create a trade surplus.
Detailed explanation-2: -Mercantilism is an economic practice by which governments used their economies to augment state power at the expense of other countries. Governments sought to ensure that exports exceeded imports and to accumulate wealth in the form of bullion (mostly gold and silver).
Detailed explanation-3: -Mercantilism is an economic theory that emphasizes self-sufficiency through a favorable balance of trade. Mercantilist economic policies rely on government intervention to restrict imports and protect domestic industries.
Detailed explanation-4: -What is an example of mercantilism? A mercantilistic example includes the Sugar Act of 1764 that made colonists pay higher tariffs and duties on imports of foreign-made refined sugar products.
Detailed explanation-5: -Adam Smith’s “The Wealth of Nations” (1776) – argued for benefits of free trade and criticised the inefficiency of monopoly. Mercantilism is a philosophy of a zero-sum game – where people benefit at the expense of others.