ECS3705
Assignment 1
Semester 2
Memo | Due 25
September 2025
NO PLAGIARISM
[Pick the date]
[Type the company name]
, Exam (elaborations)
ECS3705 Assignment 1 Semester 2 Memo |
Due 25 September 2025
Course
Economics (ECS3705)
Institution
University Of South Africa (Unisa)
ECS3705 Assignment 1 Semester 2 Memo | Due 25 September 2025. All
questions fully answered.
QUESTION 1 [18] Having studied the Mercantilist school of thought, write a
three-paragraph essay discussing Mercantilist views on wealth creation,
wealth stimulation, and the role of government in the economy.
Mercantilist Views on Wealth Creation
The Mercantilist school of thought, which dominated economic thinking in Europe between the
16th and 18th centuries, defined wealth primarily in terms of the accumulation of precious
metals such as gold and silver. Mercantilists believed that a nation’s prosperity depended on
maintaining a positive balance of trade, where exports exceeded imports. By doing so, a country
would attract an inflow of bullion, which was seen as the ultimate measure of wealth and power.
Unlike later theories that emphasized production or productivity, Mercantilism equated wealth
directly with the possession of money metals rather than the overall well-being of citizens.
Mercantilist Views on Wealth Stimulation
To stimulate wealth, Mercantilists advocated for policies that encouraged manufacturing and
export-driven growth while discouraging imports through high tariffs, quotas, and trade
restrictions. Colonies were also seen as vital sources of raw materials and captive markets for
finished goods, ensuring that wealth circulated within the mother country. By focusing on export
promotion and import substitution, Mercantilists sought to strengthen national self-sufficiency
and economic independence. Wealth stimulation, therefore, was not about expanding consumer
welfare, but about securing and enlarging the state’s stock of gold and silver through tight
control over trade flows.
Role of Government in the Economy
Government intervention was central to Mercantilist thought. Mercantilists argued that the state
should actively manage the economy to maximize national wealth and power. This involved
granting monopolies, subsidizing key industries, enforcing protectionist measures, and
regulating colonial trade. The government was also seen as responsible for maintaining strong
military power, since economic wealth and political strength were viewed as inseparable. In this
Assignment 1
Semester 2
Memo | Due 25
September 2025
NO PLAGIARISM
[Pick the date]
[Type the company name]
, Exam (elaborations)
ECS3705 Assignment 1 Semester 2 Memo |
Due 25 September 2025
Course
Economics (ECS3705)
Institution
University Of South Africa (Unisa)
ECS3705 Assignment 1 Semester 2 Memo | Due 25 September 2025. All
questions fully answered.
QUESTION 1 [18] Having studied the Mercantilist school of thought, write a
three-paragraph essay discussing Mercantilist views on wealth creation,
wealth stimulation, and the role of government in the economy.
Mercantilist Views on Wealth Creation
The Mercantilist school of thought, which dominated economic thinking in Europe between the
16th and 18th centuries, defined wealth primarily in terms of the accumulation of precious
metals such as gold and silver. Mercantilists believed that a nation’s prosperity depended on
maintaining a positive balance of trade, where exports exceeded imports. By doing so, a country
would attract an inflow of bullion, which was seen as the ultimate measure of wealth and power.
Unlike later theories that emphasized production or productivity, Mercantilism equated wealth
directly with the possession of money metals rather than the overall well-being of citizens.
Mercantilist Views on Wealth Stimulation
To stimulate wealth, Mercantilists advocated for policies that encouraged manufacturing and
export-driven growth while discouraging imports through high tariffs, quotas, and trade
restrictions. Colonies were also seen as vital sources of raw materials and captive markets for
finished goods, ensuring that wealth circulated within the mother country. By focusing on export
promotion and import substitution, Mercantilists sought to strengthen national self-sufficiency
and economic independence. Wealth stimulation, therefore, was not about expanding consumer
welfare, but about securing and enlarging the state’s stock of gold and silver through tight
control over trade flows.
Role of Government in the Economy
Government intervention was central to Mercantilist thought. Mercantilists argued that the state
should actively manage the economy to maximize national wealth and power. This involved
granting monopolies, subsidizing key industries, enforcing protectionist measures, and
regulating colonial trade. The government was also seen as responsible for maintaining strong
military power, since economic wealth and political strength were viewed as inseparable. In this
