Which of the following premises was an essential part of the idea of mercantilism?

• A. Government intervention in the economy should be minimized.
• B. Free trade between nations leads to maximum economic welfare.
• C. A nation's wealth is measured by its stock of gold and silver.
• D. Markets always reach equilibrium without external influence.

Answer: (C)

Verified step by step guidance

1. Understand the historical context of mercantilism: It was an economic theory dominant in Europe from the 16th to 18th centuries, focusing on national wealth accumulation.
2. Recall that mercantilism emphasized the importance of accumulating precious metals like gold and silver as a measure of a nation's wealth.
3. Recognize that mercantilists supported strong government intervention to control trade and protect domestic industries, opposing free trade ideas.
4. Identify that the premise 'A nation's wealth is measured by its stock of gold and silver' aligns directly with mercantilist thought.
5. Note that the other options reflect ideas from later economic theories, such as classical economics, which differ from mercantilism.