STANDARD 7-1.3 Summarize the policy of mercantilism as a way of building a nation's wealth, including government policies to control trade.

Why were colonies a critical component of the mercantilist practice?

1. Colonies provided inexpensive raw materials for European nations. 2. Colonies also provided a market for manufactured (finished) products made in Europe to be bought.

What are the 4 steps of mercantilism?

1. EXPORT more than IMPORT 2. Build COLONIES 3. Keep foreign goods out of your country by placing high TARIFFS ON ANYTHING IMPORTED IN! 4. Don't' let your colonies trade with other anyone else - besides the Mother Country!

What led to international trade occurring?

1. Improved navigational tools and technologies 2. The "discovery" and colonization of the New World. 3. Growing merchant class

Feudal System

Economy based on land ownership. A political and social system based on the granting of land in exchange for loyalty, military assistance, and other services

Colonial Expansion

Expanding an empire by taking over other places in the world and establishing colonies.

Mother Country

The country from which colonists had been sent from.

Raw Materials

Unprocessed natural products used in production

import

a good brought into a country from another country

export

a good that is sent from one country to another

tariff

a tax to be paid on a particular import or export

mercantilism

an economic theory that depends on a greater amount of exports than imports in order to increase a country's supply of gold and silver

"Market"

any arrangement that allows buyers and sellers to exchange things

bullion

gold or silver in bulk before coining

manufactured goods

items produced from raw materials

Merchant Class

people who make their living doing trades

"favorable" balance of trade

the value of exports are greater than the value of imports

global / international trade

trade between two or more partners from different countries, lands or parts of the world (an exporter and an importer)