What is the main idea of Mercantilism?

Study for the Praxis Social Studies: Content Knowledge (5081) Exam. Prepare with diverse question formats and detailed explanations. Ace your test with confidence!

The main idea of Mercantilism is that economic power is best achieved through a favorable balance of trade, where a nation exports more than it imports. This economic theory posits that trade generates wealth, primarily through the accumulation of precious metals like gold and silver, which were seen as the ultimate indicators of a nation’s wealth and power. Under Mercantilist policies, governments intervened in the economy through tariffs, monopolies, and subsidies to encourage exports and limit imports, supporting the idea that a nation’s strength is dependent on its financial resources.

This perspective emphasizes the importance of a strong state that actively regulates the economy to ensure national wealth and prosperity, which aligns closely with the essence of Mercantilism as an economic doctrine. Thus, the understanding of trade as a driver of national wealth is central to Mercantilism.

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