Statement A: A country's power relies on accumulating gold and silver surpluses. Statement B: National strength stems from economic self-sufficiency and a favorable trade balance. Statement C: Colonies are necessary for raw material sourcing and product markets. Which economic philosophy do these statements reflect?
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Answer: D. mercantile
Explanation
Mercantilism is an economic philosophy advocating that national strength depends on a favorable trade balance, accumulating precious metals, and colonial support. Mercantilist thinkers believed global wealth was fixed, requiring nations to maximize exports and restrict imports ruthlessly. Colonies served as captive markets for manufactured goods and essential raw material sources under this imperial doctrine. Mercantilism dominated European economic thought from the sixteenth through the late eighteenth centuries. Prominent mercantilist policies included high protective tariffs, navigation acts, and state-granted trade monopolies. Classical economists like Adam Smith later dismantled mercantilist dogma in The Wealth of Nations by proving mutual gains from trade.
Traditional economic systems rely on custom, history, and habitual practices rather than state-directed bullion accumulation. Feudalism was a decentralized agrarian social structure based on vassalage and land tenure rather than international trade balances. Command economies feature centralized state ownership and economic planning, which differs from historical mercantile trade systems.
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