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Under the economic system of mercantilism, the merchant class paid taxes to support the armies of their nations. What value did the governments of these nations provide as a result?

A They paid for the insurance of the merchants’ ships.

B They provided loans to the merchants.

C They enacted policies in favor of the merchants.

D They paid for the provisions of the merchants’ ships.

Scottish philosopher Adam Smith coined the term "mercantilism." He criticized what he called the "mercantile system" (or 'merchants' system,' we might say), because it restricted trade and thus restricted economic growth. The mercantile system believed the wealth of the world was a fixed amount, measured primarily in gold and silver accumulated. The system promoted a nation selling its products abroad but not needing to buy from others, or imposing heavy tariffs if importing anything. Commerce was heavily controlled by the government through charters granted to specific trading companies. That's the way that governments enacted policies in favor of the merchant class that supported the country's armies.

Smith countered by advocating a free market -- the opportunity for all nations to increase their wealth by exchanging goods freely with one another according to what would become known as capitalist principles.