ECS3705
ASSIGNMENT 1 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 25 SEPTEMBER 2025
, QUESTION 1
[18 marks]
The Mercantilist school of thought, dominant in Europe from the 16th to 18th centuries,
conceived wealth creation as the accumulation of precious metals particularly gold and
silver through maintaining a favorable balance of trade. Mercantilists believed that by
exporting more than importing, a nation could amass bullion and thereby enhance its
economic and geopolitical power. In their view, the state’s treasury was fundamentally
tied to tangible metal reserves.
To stimulate wealth, Mercantilists advocated an array of state interventions.
Governments enacted high tariffs on imports, issued subsidies to export industries, and
established monopolies to control trade flows. Colonies were leveraged as exclusive
suppliers of raw materials and consumers of manufactured goods. Such measures
ensured that trade surpluses and thus bullion inflows—would remain concentrated
within the national economy.
Accordingly, Mercantilism assigned the government a central role in the economy.
Free-market forces were subordinated to national policy. The state regulated
production, distribution, and trade in the interest of increasing national wealth and
power. This approach framed economic activity as a zero-sum contest among nations,
with government direction deemed essential to securing advantageous trade and
accumulating treasure.
ASSIGNMENT 1 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 25 SEPTEMBER 2025
, QUESTION 1
[18 marks]
The Mercantilist school of thought, dominant in Europe from the 16th to 18th centuries,
conceived wealth creation as the accumulation of precious metals particularly gold and
silver through maintaining a favorable balance of trade. Mercantilists believed that by
exporting more than importing, a nation could amass bullion and thereby enhance its
economic and geopolitical power. In their view, the state’s treasury was fundamentally
tied to tangible metal reserves.
To stimulate wealth, Mercantilists advocated an array of state interventions.
Governments enacted high tariffs on imports, issued subsidies to export industries, and
established monopolies to control trade flows. Colonies were leveraged as exclusive
suppliers of raw materials and consumers of manufactured goods. Such measures
ensured that trade surpluses and thus bullion inflows—would remain concentrated
within the national economy.
Accordingly, Mercantilism assigned the government a central role in the economy.
Free-market forces were subordinated to national policy. The state regulated
production, distribution, and trade in the interest of increasing national wealth and
power. This approach framed economic activity as a zero-sum contest among nations,
with government direction deemed essential to securing advantageous trade and
accumulating treasure.
