Mercantilism During the Age of Exploration European rulers

During the Age of Exploration European rulers increased their power enormously. The combination of

Mercantilists believed that the power of the state could be greatly increased if economic

These basic principles are… 1. Accumulation of Wealth 2. Trade with Colonies

Accumulation of Wealth • One mercantilist principle was that the state should build up

Accumulation of Wealth • A ruler’s power was judged by the luxury of the

Accumulation of Wealth • A ruler’s power depended on a plentiful supply of bullion.

If a country sold more than it bought, it would have a favorable balance

Trade with Colonies • Mercantilists saw colonies as a source of profit for the

Trade with Colonies • Mercantilists insisted that colonies buy goods from the home country,

Mercantilism Paper • You are going to write a one page paper analyzing the

What is capital? • Money and goods that are used to make more money.

What is capitalism? • The economic system based on private ownership and the use

What is inflation? • A sharp, steady rise in prices caused by excess demand.

What is the law of supply and demand? • The principle that when demand

Are there any common elements between capitalism and mercantilism? • Supply and Demand •

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Mercantilism

During the Age of Exploration European rulers increased their power enormously. The combination of booming economic growth and expanding royal power gave the rise to theory know as Mercantilism.

Mercantilists believed that the power of the state could be greatly increased if economic activities were carried on according to certain basic principles.

These basic principles are… 1. Accumulation of Wealth 2. Trade with Colonies

Accumulation of Wealth • One mercantilist principle was that the state should build up wealth in the form of precious metals.

Accumulation of Wealth • A ruler’s power was judged by the luxury of the royal court and the size of his army.

Accumulation of Wealth • A ruler’s power depended on a plentiful supply of bullion.

If a country sold more than it bought, it would have a favorable balance of trade. In simple terms, it means the difference in value between imports and exports.

These basic principles are… 1. Accumulation of Wealth 2. Trade with Colonies

Trade with Colonies • Mercantilists saw colonies as a source of profit for the home country. The colony was expected to supply wealth, either gold or silver from its mines or valuable raw materials.

Trade with Colonies • Mercantilists insisted that colonies buy goods from the home country, not from other countries or even other colonies.

Mercantilism

Mercantilism Paper • You are going to write a one page paper analyzing the relationship between the rise of mercantilism and the increased power of European rulers. Show the principles of mercantilism supported the growth of strong governments. Make sure that you give examples of these governments. This paper is worth 10 points.

Capitalism

What is capital? • Money and goods that are used to make more money.

What is capitalism? • The economic system based on private ownership and the use of capital.

What is inflation? • A sharp, steady rise in prices caused by excess demand.

What is the law of supply and demand? • The principle that when demand for a product exceeds its availability, prices rise; when the supply exceeds demand, prices fall.

Are there any common elements between capitalism and mercantilism? • Supply and Demand • Money • Rich get Richer

Capitalism