Question

Mercantilists believed that:

A. merchants should import goods to raise the level of living.

B. governments should lower import duties.

C. a nation should have an export surplus in order to accumulate precious metals.

D. a nation should produce goods for which there is a comparative advantage.

E. two of the above.

Answer 1

The correct answer is that mercantilists believed a nation should have an export surplus to accumulate precious metals, in line with the mercantilist theory that emphasized wealth accumulation through trade.

Step-by-step explanation:

Mercantilists believed that a nation should have an export surplus to accumulate precious metals. The key feature of mercantilist theory was wealth accumulation through a favorable balance of trade, which meant maximizing exports and minimizing imports to increase the nation's stock of gold and silver.

Mercantilism involved heavy government intervention with policies such as imposing high tariffs and providing subsidies to domesticated industries. The goal of mercantilist practices was to strengthen the nation economically and strategically at the expense of both competitors and, in many cases, its colonies.