Final answer:
Spain found primarily gold, silver, and spices in Latin America and used these resources to fund military campaigns and royal expenditures. The economic policies, centered on precious metals and strict trade controls, eventually led to Spain's economic decline due to unsustainable resource management.
Step-by-step explanation:
Natural Resources Found by Spain in Latin America
The natural resources that Spain found in Latin America were primarily gold and silver, along with other valuable commodities such as spices, cochineal for crimson dye, leather, and agricultural products like cotton and sugar. The Spanish government used these resources mainly for funding military campaigns and royal expenses by instituting the quinto rule, where one-fifth of all precious metals mined in the colonies was to go to the Spanish crown.
Use of Resources by the Spanish Government
These resources were critical in maintaining Spain's economic and political power. Large shipments of gold and silver were sent back to Spain. Interestingly, this inflow of precious metals led to long-term economic challenges, including inflation and the undervaluation of other economic sectors. Additionally, regulations placed on trade meant that colonies could only export raw materials to Spain and import finished goods, hindering local industry in the colonies.
Economic Impact
Ultimately, the focus on precious metals and strict trade policies contributed to a cycle where Spain's wealth was not sustainably managed. The dependence on these precious metals did not translate into lasting economic stability. Over time, Spain faced economic hurdles, such as having to borrow money, due to the mismanagement of resources, military overexpansion, and the lack of a diversified economy.