HISTORY
NEW GLOBAL CONNECTIONS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The amount of gold a country had
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A nation’s ability to produce
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A country’s diversity in materials
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How many colonies it controlled and owned
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Detailed explanation-1: -This theory stated that a country’s wealth was determined by the amount of its gold and silver holdings. In it’s simplest sense, mercantilists believed that a country should increase its holdings of gold and silver by promoting exports and discouraging imports.
Detailed explanation-2: -What is mercantilism? 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 also based on the idea that the amount of precious metal (gold or silver) owned by a nation determines its economic well-being. Crucial to mercantilist theorist is the believe that every nation must strive for economic independence by having regulations that aid exports of goods.
Detailed explanation-4: -Amount of wealth in the world is relatively static. A country’s wealth is best ascertained by the amount of precious metals it possesses. The need to encourage export instead of imports as a means for obtaining a favourable balance of trade in order to yield precious metals.