| Question | Answer |
| What was the root problem associated with Mercantilism? | The misconception that money is wealth. |
| Nationalization | When a nation's government assumes the ownership of companies on a very large scale. |
| Mercantilism | Promoted the acquisition of precious metals, not as the means to an end but as the end itself. |
| A classic work written by Adam Smith | "The Wealth of Nations" |
| Favorable balance in trade: | When a nation sells more goods than it buys. |
| laissez Fair | "let alone" |
| Exploration associated with Mercantilism | Discovere and swize new sources of gold and silver by sending explorers abroad to plunder less-developed civilizations and by supporting privateers to steal from neighboring nations. |
| State capitalism | Private citizens own the vast majority of natural resources, financial capital, and labor, nut the government freely intervenes in the decision-making process to carry out its economic and social goals. |
| Domestic manufacturing Associated with mercantilism. | Mercantilists considered the manufacture of goods for the nation's people to be of secondary important, because selling goods to its own citizens did not increase a nation's stockpile of goods. |
| Privatization | when a govnerment decides to sell its nationalized businesses back to private stockholders. |
| What are the major forms of capitalism and socialism | Communism and Radical capitalism |
| Welfare state | A state in which taxes are very high, and funds are redistributed in such a way that the government claims to care for its citizens form the cradle to the grave. |
| Centralized socialism | Maintains that the sensational government should be both the central owner and the decision maker in all economic affairs of the state. |
| What was the lengthy book written by Adam Smith | "An inquiry into the Nature and Causes of the Wealth of Nations" |
| Social Democracy | A traditional economic system bridging the gap between capitalism and socialism |
| Trade trade associated with mercantilism | Increase exportation of goods and services while decreasing importation of foreign goods; Strived for a favorable balance in trade. |
| Radical capitalism | Capitalism in its most extreme form and exists only as an economic theory. For such country to exist pricat citizens would own all the factors of production. |
| Classical liberal capitalism | The form of capitalism that accepts the existence of government but allows it only minimal ownership of resources and decision making power to perform its responsibilities.
(Form of capitalism in the writings of Adam Smith) |
| Alliances associated with Mercantilism: | Arranged all foreign relationships in a way that minimized competition. |
| Communism | A socialism in its most extreme form. |
| Two questions answered by people to determine weather a nation is more capitalist or socialist: | Who owns the nation's factors of production?
Who answers the three economic questions? |
| Colonization associated with Mercantilism: | Encouraged the colonization of new teritories to acquire new supplies of the factors of production that would then be used to produce goods that other nations could not produce. |
| Five-point program associated with Mercantilism: | Exploration; trade; Domestic manufacturing; Colonization; Alliances |
| Public goods | Goods that benefit nearly the entire nation. |
