(a) Why did the Mercantilists think that a situation where a country’s exports exceed its
imports is a “favorable” situation for the country? Briefly, what policies would a Mercantilist recommend in order to generate such a “favorable” situation?

(b) What was the “price-specie-flow doctrine” and how did it undermine Mercantilist thinking? Why would a situation where the demands for traded goods are “inelastic” with respect to price changes pose a problem for the “price-specie-flow doctrine” in its attack on Mercantilist thinking?

Question

(a)  Why did the Mercantilists think that a situation where a country’s exports exceed its 
	imports is a “favorable” situation for the country?  Briefly, what policies would a  	Mercantilist recommend in order to generate such a “favorable” situation?

(b)  What was the “price-specie-flow doctrine” and how did it undermine Mercantilist 	thinking?  Why would a situation where the demands for traded goods are “inelastic” 	with respect to price changes pose a problem for the “price-specie-flow doctrine” in its 	attack on Mercantilist thinking?

Quizplus · Accepted Answer

The Answer of (a)  Why did the Mercantilists think that a situation where a country’s exports exceed its 
	imports is a “favorable” situation for the country?  Briefly, what policies would a  	Mercantilist recommend in order to generate such a “favorable” situation?

(b)  What was the “price-specie-flow doctrine” and how did it undermine Mercantilist 	thinking?  Why would a situation where the demands for traded goods are “inelastic” 	with respect to price changes pose a problem for the “price-specie-flow doctrine” in its 	attack on Mercantilist thinking?

(A) Why Did the Mercantilists Think That a Situation