Europeans Expansion and Business Standard and 7.1.4

1. Economic Changes in Europe Resulted from…….. 1. Growth of International Trade 1. Growth of International Trade 2. Discovery and colonization of New World 2. Discovery and colonization of New World 3. Growing Middle Class 3. Growing Middle Class 4. Complex Economy 4. Complex Economy

2. The Columbian Exchange A. This movement of goods, ideas, people, and disease across the Atlantic is called the Columbian Exchange.

3. Mercantilism A. Europeans countries believed the more bullion (gold and silver) you had the more powerful you had. B. Government sought to control and regulate trade- balance of trade.

4. Mercantilism step-by-step A. First- you had to export more than you imported. B. Second- build colonies- they will give you raw materials and products that you don’t have so you can export them and provide a market for finished products.

4. Steps Continued C. Third- keep foreign goods out of your country with high tariffs. D. Fourth- increase exports by preventing colonies from trading with other nations- colonies can only trade with the mother country.

5. Commercial Revolution A. Merchants had to learn the way of supply and demand. Demand supply B. If business have a lot of a certain item and people do not want it, they set a low price so people will buy it.

Entrepreneurs A. Entrepreneurs risk money in hopes of earning a profit. B. Some projects were too large for one person so joint-stock companies were formed.

New Class of People- Middle Class Merchants and businessmen Merchants and businessmen Take risks to make a profit off of international trade Take risks to make a profit off of international trade Contributed to a growing market economy Contributed to a growing market economy

What is a market economy? Economic system based on the exchange of goods and services for the purpose of making capital- money Economic system based on the exchange of goods and services for the purpose of making capital- money The market place The market place

What creates Capitalism? Mercantilism Mercantilism International Trade International Trade Rise of the middle class Rise of the middle class Developing market economy Developing market economy

6. Capitalism A. During the commercial revolution, Europeans began relying on people not governments to own property, make goods and buy and sell them freely = capitalism. B. Driven by the desire to make a profit.