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Mercantilism was the economic philosophy underlying English colonial policy. The object of mercantilism was to enhance the wealth of the Mother County (Great Britain) in gold & silver. To complete that goal, a favorable balance of trade was desired. That means that a nation would sell more than it would obtain, therefore creating a surplus in the treasury. The name of the philosophy points out the significant is of merchants in this policy. Merchants would sell products to foreign nations and purchased items to be sold within the nation. Colonies played a very important role in mercantilism. A colony would supply the essential raw materials to the industries of England and the colonists would be a source of income to the nation due to they would buy the finished products and supplies they required to grow, from the Mother Country. The ideal was to become self-sufficient. The nation would make everything its people required and buy nothing from foreign nations. Hence the ideal could not be accomplished in the actual world of economics, the object of mercantilism was to minimize imports that cost money and maximize exports and the trade that brought money in to the nation.
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what is money supply
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