1. Mercantilism

2. The Age of Exploration provides tremendous wealth from colonies: Mexico/ S. America Gold / Silver Spain North America Sugar / Coffee England/ France Asia Spices / Gems Portugal / Dutch

3. All of this new wealth creates a new economic system in Europe called Mercantilism A Nation’s Power The Amount of Gold and Silver they own Mercantilists believed there was a fixed amount of wealth in the world.

4. The only way to get more wealth was to take it from another nation. Mercantilist countries needed large armies and navies to protect its wealth.

5. In order to get more gold, nations need a good balance of trade More Exports to others countries. Exports are goods sold to other countries Less imports from other countries. Imports are goods bought from other countries.

6. In order to get a favorable balance of trade, the government controlled the economy through: Tariffs Taxing imports coming into the country Subsidies Paying to start industries at home Owning sources of raw materials like lumber, agriculture goods, and precious metals; Self-sufficient

7. Colonies are important for mercantilism They become the source of raw materials and precious metals They become places to sale finished goods from the home countries industry. Home countries pass laws that prevent the colonies from trading with anyone but the home country

8. Mercantilism creates economic change Capitalism: Individuals create and own business Joint stock companies form to invest in business by selling shares This will become the modern corporation The most famous is the Dutch East Indies Company