Results of the Age of Exploration JOINT STOCK
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Results of the Age of Exploration JOINT STOCK COMPANIES AND MERCANTILISM
The Commercial Revolution The establishment of colonial empires in the Americans influenced the nations of Europe. � New wealth from the Americas was coupled with a dramatic growth in overseas trade � These prompted a new wave of business and trade practices in Europe during the 16 th and 17 th centuries. � This dramatically changed the economic atmosphere of Europe and became known as the Commercial Revolution. �
Joint-Stock Companies (!!!) � Worked much like a modern-day corporation. � A number of people pooled their wealth for a common purpose � Ex: VA Company going to Jamestown
Joint-Stock Companies � Purpose = American colonization � Took large amounts of money to establish overseas exploration � While profits may have been great, so were risks � Many ships never completed the long and dangerous ocean voyage � Would only lose your small share if you invested and the colony failed
Mercantilism � New economic policy �A country’s power depended mainly on its wealth �It was wealth that allowed nations to build strong navies and purchase vital goods �The goal of every nation became the attainment of as much wealth as possible!!!
Favorable Balance of Trade (!!!) �A country could increase its wealth and power in two ways: �It could obtain as much gold and silver as possible �Second, it could establish a favorable balance of trade, in which it sold more goods than it bought
Colonies and Mercantilism A nation’s ultimate goal was to become selfsufficient. � Mercantilism went hand in hand with colonization, for colonies played a vital role in the new economic practice. � �Aside from providing silver and gold, colonies provided raw materials that could not be found in the home country, such as wood or furs. �In addition to playing the role of supplier, the colonies under mercantilism also provided a market �The home country could sell its goods to their colonies
Main Characteristics of Mercantilism � 1. A nation’s wealth depends on its stores of bullion (gold and silver). . . (achieving more wealth/prosperity � means another nation suffers a simultaneous loss of wealth/prosperity); � 2. Favorable balance of trade (when goods exported of greater value than those imported); � 3. Raw materials from colonies to the mother country; � 4. Colonies to become markets for the Mother Country’s goods; � 5. Closed market: required to purchase manufactured goods from Mother Country
� http: //www. investopedia. com/video/play/ mercantilism/
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