How did mercantilism affect the US economy?

Also, be sure to look at our Guide to the AP US History Exam. Mercantilism, also known as the Mercantile System, was an economic policy prevalent in Europe from the 16th to the 18th centuries. It intended to increase a nation’s wealth and power through the promotion of exports, the acquisition of precious metals, and the establishment of colonies.

What is mercantilism in economics?

Mercantilism, economic theory and practice common in 16th–18th-century Europe that promoted governmental regulation of a nation’s economy for the purpose of augmenting state power at the expense of rival national powers; it was the economic counterpart of political absolutism. Learn more about mercantilism here.

Why did mercantilism occur?

Monetarism offers a third explanation for mercantilism. European trade exported bullion to pay for goods from Asia, thus reducing the money supply and putting downward pressure on prices and economic activity.