ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Profits from these investments enabled merchants and traders to reinvest even more money in other enterprises. As a result, businesses across Europe grew and flourished. The increase in economic activity in Europe led to an overall increase in many nations’ money supply.

Detailed explanation-2: -As trade grew, the merchants in town became very important. Trade led to alliances between towns, each town specializing in different crops and relying on each other for their supplies.

Detailed explanation-3: -What was a result for increased markets and fairs? It made merchants willing to take chances on buying merchandise that they could sell at a profit. Merchants then reinvested the profits in more goods.

Detailed explanation-4: -Trading and traveling helped the merchants and peasants to break off from the form of the king’s and lord’s feudal system. It allowed the people to depend on themselves and grow their cities and towns.

Detailed explanation-5: -Arab merchants carried Indian trading goods to Constantinople. From there, Italian merchants would buy the goods and then sell them in European countries. Through this trade, Constantinople became the centre of international trade between the East and the West and came to be known as the ‘Gate of European Trade’.