What is the definition of mercantilism?

Mercantilism is defined as an economic theory that emphasizes the importance of accumulating wealth, particularly in the form of gold and silver, through a favorable balance of trade. This concept arose in the late medieval period and dominated European economic policy from the 16th to 18th centuries. Under mercantilism, nations sought to export more than they imported, believing that a strong trade surplus would enhance national power and wealth. This approach often led to government intervention in the economy to regulate trade and develop industries to achieve a competitive advantage in international markets.

The focus on maximizing exports and limiting imports through tariffs and other trade barriers is a hallmark of mercantilist policies. This strategy reflects the belief that the global economy is a zero-sum game, where one nation's gain in wealth is another's loss. In contrast, the other options do not encapsulate the full essence of mercantilism or relate to its economic framework in the same way.