What economic theory emphasizes the importance of trade and accumulation of wealth for national strength?

The correct answer is mercantilism, which is an economic theory that emphasizes the importance of trade and the accumulation of wealth as means to enhance national power and security. During the 16th to the 18th centuries, mercantilism shaped the policies of European powers, who believed that a nation’s strength was directly tied to its wealth, primarily measured in gold and silver. Under this system, countries sought to maximize exports and minimize imports, thereby ensuring that they maintained a favorable balance of trade.

Mercantilist policies often involved strict government regulation over the economy, including the establishment of monopolies and tariffs that protected domestic industries. The focus on colonial expansion was also a key aspect of mercantilism, as colonies provided raw materials and markets for manufactured goods, further bolstering the wealth of the mother country. This ideology laid the groundwork for many economic policies and practices that influenced early American economic development and its relationships with Europe and colonial territories.