Question

As the Spanish established American colonies, they sent silver and gold mined in the Americas to Spain. Spain, like many other European countries of the time, believed that a country's wealth depended on how much silver and gold it owned. This is an example of which type of economic system?

Answer 1

mercantilism

(Mercantilism was an economic system that was prevalent among European nations during the sixteenth, seventeenth, and eighteenth centuries. This economic policy greatly influenced the economic activities of European countries and their colonies. Because nations that followed this economic policy felt their power depended on the amount of silver and gold that they possessed, countries like Spain tried to acquire as much silver and gold as possible.) Hope this helps!:)

Answer 2

This is an example of a mercantilism type of economic system. Spain's nearly nonexistent industrial base forced the country to import commodities. Additionally, gold was essential to Spain since it was used to manufacture currency. Spain has to pay for its own defense against other nations. Without money, Spain was a helpless, impoverished nation.

What is mercantilism?

Governments utilized their economy to strengthen state authority at the expense of other nations in a process known as mercantilism. Governments attempted to build up wealth in the form of bullion, primarily gold and silver, and to ensure that exports surpassed imports.

These shiploads of gold and silver simply increased the amount of money in circulation, which decreased the value of Spain's existing currencies. The Spanish economy was under significant strain from American bullion, and this pressure only grew as a result of the additional expenses associated with the empire.

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