Final answer:
The belief that the accumulation of precious metals is essential to a nation's welfare is known as Mercantilism. This economic theory played a significant role in the trade and policies of European nations, emphasizing the importance of a favorable balance of trade to increase national wealth in gold and silver.
Step-by-step explanation:
The term that describes the belief that the accumulation of precious metals is essential to a nation's welfare is A) Mercantilism. Mercantilism is an economic theory that suggests a country's power is directly related to its wealth in gold and silver. This system promoted the idea that the total amount of wealth in the world, measured in these precious metals, was finite. Therefore, one nation's gain was viewed as another's loss.
Mercantilism encouraged nations to aim for a favorable balance of trade, where they would export more goods than they import to ensure that gold and silver flowed into the country rather than out. European governments implemented mercantilist policies by imposing tariffs, creating monopolies, and supporting domestic industries to improve their balance of trade and ultimately increase their stockpile of precious metals.
The mercantilist system influenced many nations' approach to colonies, which were expected to supply raw materials and serve as markets for the home country's manufactured goods, further enhancing the wealth and power of the colonizing nation through the accumulation of gold and silver.