Final answer:
Gold was used historically according to the principles of mercantilism, to increase a nation's wealth by maximizing exports and minimizing imports, thereby amassing more gold and enhancing national power.
Step-by-step explanation:
Historically, the economic philosophy of mercantilism played a significant role in determining how gold was used by nations. Mercantilism advocated for a nation to increase their wealth by maximizing exports and minimizing imports to maintain a favorable balance of trade. Gold and silver, seen as finite and critical resources, were central to this philosophy, as the accumulation of these precious metals was tied directly to a nation's power and ability to support large armies and navies. Nations also strived to establish colonies to mine natural resources and to control markets for their manufactured goods, creating a wealth cycle that favored the colonial powers.
The use of gold to trade with other countries was essential for nations seeking to maintain a favorable balance of trade. By minimizing the import of finished goods and maximizing the export of commodities and manufactured products, countries aimed to ensure that more gold flows into their treasuries rather than out. This often led to the establishment of trade monopolies, the imposition of tariffs, and the subsidization of domestic industries to support this system.