Question

Which of the following situations would not be supported by a government practicing a mercantilist economic system? A. The country's citizens support laws protecting domestic industries from foreign competition. B. The country's navy uses imported wood and steel to build its ships. C. The country's largest businesses successfully sell goods in foreign markets. D. The country's wealthiest citizens refuse to purchase luxury goods from other countries.

Answer 1

The correct answer is "B".

Mercantilsm is a government economic policy which consists on the high level of government intervention in the nation's industries. This is normally made with the purpose of gaining a competitive edge against rival nations.

Common practices in mercantillism include the accumulation of finished goods, focus on increasing exports of, and the promotion of consumption of local goods and resources.

Therefore, it would go against this policy to consume imported goods from other countries, as this would be considered as not benefitial to the economy.