.

Economics is the study of production, distribution and consumption of goods and services. And we have
4 economic questions and how a society answers this questions.

1. What should we produce?

2. How much should we produce?

3. How should we produce it?

4. Who should consume it?

In a command economy which is based on state control, the government answers this question
mercantilism is a type of command economy it is not a market economy. We got 2 types of economy, a
command economy which has central authority, and market economy which is based on decisions made
by individuals.

So what is mercantilism? Mercantilism is an economic policy that is designed to maximize the exports
and minimize the imports for an economy. It promotes tariffs and subsidies on traded goods to achieve
that goal. Mercantilism comes from the same word merchant and it is the philosophy of trade not only
external trade with other countries, but also internal trade within a country.

The economics assumptions of mercantilism: National wealth is measured in precious metals, wealth is
finite and for a mercantilist there's limited amount of gold and silver, and we can’t get as much as we
want.