Question

The British theory of mercantilism, by which the colonies were governed, held that

a. a nation’s economy should be entirely shaped by free market forces, without government interference.
b. the colonies should develop by becoming as economically self-sufficient as possible.
c. the colonial economy should be carefully controlled to serve the home country’s needs.
d. colonists could develop economic growth by trading with whatever country offered the best profits. e. the mother country and the colonies should each specialize in producing goods where they had a comparative economic advantage.
2. One of the ways in which mercantilism harmed the colonial economy was by
a. prohibiting colonial merchants from owning and operating their own ships.
b. inhibiting the development of banking and paper currency in the colonies.
c. forcing the colonists to fall into debt through the purchase of goods on credit.
d. forcing Virginia tobacco planters to sell their product only in Britain.
e. taxing colonial goods at a higher rate than the same goods produced in Britain

Answer 1

1. Letter C is the correct answer.

2. Letter E is the correct answer.

Mercantilism was an economic system used by European powers from the 16th to the 18th centuries. This system was responsible for generating wealth to national powers while colonies were being strongly explored. According to the British theory of mercantilism, the colonies should be carefully controlled in order to support the metropole's needs. Thus, taxing colonial goods at a higher rate than the same goods produced in Britain was a mercantilist strategy found that served the home country's needs and harmed the colonial economy at the same time.