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7-1.3 Burnette
Mercantilism
| Term | Definition |
|---|---|
| Mercantilism | The theory that a nation became richer and more powerful by regulating trade so that it had a favorable balance of trade so it could build up its supplies of bullion (gold and silver). It depended on colonies for cheap raw materials |
| Favorable balance of trade | when a country has more valuable exports (things it sells to another country) than imports (things it buys from another country) |
| Bullion | gold and silver |
| wealth | how much money and property, and how many valuable possessions, or people a nation has |
| Global trade | the exchange of capital (money), goods, and services between nations |
| Colonization | when a country sets up colonies, which can be a settlement of its own citizens in a distant land, or when a country takes over and rules another land or people |
| Feudal system (feudalism) | under feudalism (before the 1600s), nobles with self-sufficient manors shaped the economy and controlled resources; feudalism came before mercantilism |
| Exports | goods or services sold to another country |
| Imports | goods or services bought from another country |
| Mother country | the country from which the people of a colony came |
| Raw materials | a natural resource such as oil, iron, or wood used to make or manufacture something else, often a finished product |
| Market | a place or system wherein goods and/or services are bought and sold |
| Finished products | goods that have completed the manufacturing process and are ready to be sold; examples: clothing, silverware, a table |
| Tariff | a tax placed on goods imported from another country |
| Columbian Exchange | the movement of goods, people, ideas, and diseases back and forth across the Atlantic Ocean |
| Triangular Trade | the trade involving the shipment of manufactured goods from Europe to Africa, the shipment of slaves from Africa to the Americas, and the shipment of staple goods or crops and rum from the Americas to Europe |
| Supply and Demand | determines the price of a good or service in a free market; when demand is greater than supply, prices rise; when supply is greater than demand, prices fall |
| Adam Smith | In 1776, he published the book The Wealth of Nations, which outlined the basic principles (ideas) of modern capitalism |
| Capitalism | : a type of economy in which the means of production (land, factories, and natural resources) are privately owned and operated for profit in a competitive market |
| Laissez-faire | the idea that the economy works best when free from government intervention and control |
| David Ricardo | economist who developed the idea of comparative economic advantage |
| Comparative Economic Advantage | When one company or country can produce a particular good more efficiently than other. If each country focuses on producing what it makes most efficiently, and countries trade, people will have more material goods than they would have otherwise. |
Created by:
oburnette
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