Answer to Question #297300 in Economics for pat

Question

Explain why Mercantilism was advanced by countries in the past indicating its merits and

demerits.

Answer 1

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).

The balance of trade was a key component of mercantilism – imports were bad, and exports were good. Mercantilism focused on controlling gold in order for colonists to pay for its large armies and expand its empire. At the core of mercantilist belief was that one nation could only benefit at another nations expense.