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What is an Example of Mercantilism?

By BYJU'S Exam Prep

Updated on: November 9th, 2023

The Example of Mercantilism is the Sugar Act of 1764, which required American colonists to pay higher customs and charges on imported refined sugar products manufactured elsewhere. Mercantilism is an economic strategy intended to increase an economy’s exports while reducing its imports. In European countries, imperialism and colonialism resulted from an economic plan.

Mercantilism Examples

A country prioritizes maintaining a favorable trade balance by increasing exports and reducing imports from other nations and is said to practice mercantilism. Its goal is to strengthen a nation’s military and political dominance while empowering it through resource and wealth acquisition. A “mercantilism” economic strategy or trade practice is one that nations use to increase their wealth and power by maintaining a favorable trade balance by increasing exports while decreasing imports.

During the 16th and 18th centuries, this policy allowed European countries such as the United Kingdom and France to purchase less expensive raw materials from their colonies and export finished goods in exchange for gold and silver coinage.

  • A positive trade balance denotes a situation in which one country’s loss is required to compensate for another’s gain.
  • During the mercantilist era, merchants and the government worked together to build wealth by restricting imports of foreign-made goods.
  • However, capitalism places a greater emphasis on generating wealth by letting private enterprises export their products with little to no intervention from the government.

Summary:

What is an Example of Mercantilism?

A good example of Mercantilism is the Sugar Act of 1764, which required American colonists to pay higher customs and duties on imported refined sugar goods made elsewhere. In a given economy, the mercantile policy seeks to reduce imports while increasing exports. Imperialism and colonialism in European countries resulted from a financial plan.

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