The economic theory of mercantilism holds that
A)a continuing trade surplus should be a government's major policy goal.
B)the main source of wealth of a country is its productive capacity.
C)free trade is the result of countries exploiting their comparative advantage.
D)none of the options

Question

Quizplus · Accepted Answer

The economic theory of mercantilism advocates for a government policy that prioritizes maintaining a continuous trade surplus, which is the excess of exports over imports. Mercantilists believe that a country's wealth is determined by the accumulation of precious metals such as gold and silver, which can only be achieved through exports exceeding imports. Therefore, countries should protect their domestic industries, restrict imports, and encourage exports to achieve a favorable balance of trade.

The Economic Theory of Mercantilism Holds That