Under the economic theory of mercantilism, which of the following actions did countries primarily take to increase their power?

• A. Encouraged domestic production and export of goods
• B. Promoted free trade with other nations
• C. Accumulated large reserves of gold and silver
• D. Imposed tariffs and restrictions on imports

Answer: (D)

Verified step by step guidance

1. Understand that mercantilism is an economic theory prevalent from the 16th to 18th centuries, which emphasized that a country's power was directly related to its wealth, particularly measured by the accumulation of precious metals like gold and silver.
2. Recognize that under mercantilism, countries aimed to achieve a favorable balance of trade, meaning they sought to export more than they imported to bring wealth into the country.
3. Identify that to increase exports and reduce imports, mercantilist policies encouraged domestic production of goods to be sold abroad and imposed tariffs or restrictions on imported goods to protect local industries.
4. Note that mercantilist countries accumulated large reserves of gold and silver as a result of their trade surpluses, viewing these reserves as a source of national strength and security.
5. Conclude that mercantilism did not promote free trade; instead, it favored protectionist measures such as tariffs and import restrictions to maintain a positive trade balance and increase national wealth.