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 above

Question

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Mercantilism is an economic theory that argues for a government to maintain a trade surplus as a major policy goal. A trade surplus is achieved when a country exports more goods than it imports, resulting in a net inflow of money. Mercantilists believed that a country's wealth could be measured by the amount of gold and silver it possessed. As a result, they advocated policies that would increase exports and decrease imports, such as tariffs and subsidies for domestic industries.

The Economic Theory of Mercantilism Holds That