The Basic Principles of Mercantilism Mercantilism - an economic policy under which nations sought to increase their wealth and power by obtaining large amounts of gold and silver and by selling more goods than they bought.

A nation’s strength depends on its wealth which is measured in gold and silver.

2. Only a limited amount of wealth exists in the world and nations have to compete for their share of that wealth.

3. A favorable balance of trade is important in gaining and keeping wealth.

4. Countries should limit imports and maximize exports.

5. A country should have its own source of raw materials to avoid dependence on others.

6. Colonies exist only as a way for the home country to make money.

7. A country’s colonies should not trade with other countries