ECS3705
Assessment 1
Semester 2 2025
Due September 2025
, ECS3705
Assessment 1
Semester 2 2025
Due September 2025
History of Economic Thought
QUESTION 1
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.
Mercantilists viewed wealth creation primarily as the accumulation of precious metals—
especially gold and silver—which they regarded as the ultimate indicator of national
prosperity. Central to their belief was the notion that global wealth was finite, meaning
that one nation’s gain was inherently another’s loss. To secure prosperity, they
emphasized maintaining a favorable balance of trade in which exports consistently
exceeded imports, thereby generating an inflow of bullion. This zero-sum outlook
encouraged prioritization of manufactured goods for export while raw materials were
imported at minimal cost, often from colonies. While this strategy successfully expanded
state treasuries and strengthened early modern European powers, it also overlooked
the possibility of wealth creation through innovation, productivity growth, and the
expansion of global markets—concepts that would later underpin classical and modern
economic theories.
To stimulate wealth, Mercantilists advocated an integrated system of policies designed
to strengthen domestic industry and extend colonial influence. Colonies were regarded
as indispensable sources of raw materials and captive markets for manufactured
Assessment 1
Semester 2 2025
Due September 2025
, ECS3705
Assessment 1
Semester 2 2025
Due September 2025
History of Economic Thought
QUESTION 1
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.
Mercantilists viewed wealth creation primarily as the accumulation of precious metals—
especially gold and silver—which they regarded as the ultimate indicator of national
prosperity. Central to their belief was the notion that global wealth was finite, meaning
that one nation’s gain was inherently another’s loss. To secure prosperity, they
emphasized maintaining a favorable balance of trade in which exports consistently
exceeded imports, thereby generating an inflow of bullion. This zero-sum outlook
encouraged prioritization of manufactured goods for export while raw materials were
imported at minimal cost, often from colonies. While this strategy successfully expanded
state treasuries and strengthened early modern European powers, it also overlooked
the possibility of wealth creation through innovation, productivity growth, and the
expansion of global markets—concepts that would later underpin classical and modern
economic theories.
To stimulate wealth, Mercantilists advocated an integrated system of policies designed
to strengthen domestic industry and extend colonial influence. Colonies were regarded
as indispensable sources of raw materials and captive markets for manufactured
