Mercantilism and Capitalism
Tariffs
A tax put on goods made in other countries
Mercantilism
An economic policy under which nations seek to increase their wealth and power by obtaining large amounts of gold and silver and by selling more goods than they buy.
Capitalism
An economic system characterized by private ownership and investment in the means of production (i.e., capital); a system in which economic decisions are based on supply and demand, competition, and price in a free market.
Market economy
An economic system in which prices are determined by the free exchange of goods and services with minimum government interference.
Joint Stock Companies
Businesses owned by shareholders that invested in exploration and colonization
Cottage Industry
Merchants started hiring peasants to make items in their homes (hence cottage being used)
Adam Smith
Scottish philosopher who wrote a "Wealth of Nations" advocated the idea of laissez faire; or government not involving themselves in the economy. Credited for beginning capitalism
Demand
The desire and ability of individuals to purchase economic goods or services at the market price. Along with supply, one of the two key determinants of price.
Supply
The quantities of a good or service that a firm is willing and able to make available for sale at varying prices (economic concept of supply and demand).
free enterprise
a type of economy in which people are free to buy, sell, and produce whatever they want
colony
country under the full or partial control of another country.
Columbian Exchange
global exchange of people, goods, technology, ideas, and diseases
bullion
gold and silver in the form of bars
Import
items that are bought from another country
entrepreneurs
people who risk their time, money, and other resources to start and manage a business
Export
sell to other countries
Commerce
the buying and selling of goods
Balance of Trade
the difference between a country's total exports and total imports
Middle class
the social group between the upper and working classes, including professional and business workers and their families.
Capital
wealth in the form of money or other assets owned by a person or organization