Question

question 12 of 20
how does mercantilism compare with capitalism, or the free enterprise system?

a. mercantilism encourages international trade, while capitalism places limits on imports and exports.

b. mercantilism seeks to create a society without classes, while capitalism allows for social inequality.

c. mercantilism is based on economic regulation, while capitalism is based on economic freedom.

d. mercantilism promotes agricultural economies, while capitalism promotes industrial economies.

Explanation:

• Option A: Mercantilism actually imposed trade restrictions (like tariffs) to build wealth, while capitalism (free enterprise) encourages free trade, so A is wrong.
• Option B: Mercantilism was about state - led economic power and didn't aim for a class - less society; that's more related to socialism/communism. Capitalism does have social inequality, but the first part of B is incorrect.
• Option C: Mercantilism relied on government regulation (e.g., controlling trade, colonies, and industries) to accumulate wealth (usually in the form of gold). Capitalism (free enterprise) is based on economic freedom, where individuals/businesses have the right to own property, make economic decisions, and compete freely with minimal government interference. This matches the key differences.
• Option D: Mercantilism was more about trade and manufacturing for export (not just agriculture), and capitalism can include both agricultural and industrial economies (and has evolved with technology). So D is incorrect.

Answer:

C. Mercantilism is based on economic regulation, while capitalism is based on economic freedom.