Mercantilism

• Economic theory that states exports should exceed imports

• Money should stay within a country

• Colonies exist to make money for the mother country

The Flow of Goods

• Natural resources are taken from colony to mother country

• Mother Country sells manufactured goods back to colony

• ​Mother Country decides who the colony trades with.

Exports and Imports

• Exports are goods that leave a country because they've been bought by other countries

• Imports are goods that come in a country because the citizens have bought them

Raw Materials vs. Manufactured Goods

• Raw Materials are the basic materials from which a product is made

• Manufactured goods are items made from raw materials using machinery and labor

• Colony – A territory under the control of another country, typically a distant one, and occupied by settlers from that country

  • Colonies give the mother country natural resources, land and a place to sell products

• 3 types of colonies

  • Trading post - small village set up to trade with natives

  • Plantation - large farms set up to grow cash crops

  • Settler - towns or cities set up to claim territory