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In a short essay, discuss the theory of mercantilism, and discuss favorable and unfavorable balances of trade as they apply to international business. (A 3-page response is required.)

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Running head: BALANCE OF TRADE

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Balance Of Trade
Institution Affiliation
Instructor’s Name
Student’s Name
Course Code
Date

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BALANCE OF TRADE
BALANCE OF TRADE
Discuss the theory of mercantilism
The mercantilism refers to a theory of trade supported by the significant Europeans
powers. The approach is based on the making a difference in a country where it is supposed to

ensure that they accumulated bullion of gold (Aizenman, & Lee, 2007). The mercantilism theory
holds that the country is holding of treasure measures the country's wealth. The treasure, in this
case, refers to the gold reserves that the country has. The theory states that the country should
ensure that they export more then the imports and if successful receive gold from countries that
run deficits. The approach holds that the governments in the given country have a big role to play
in the ensuring of the wellbeing of the country by providing that the state does not run on a
defici...


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