An Inconsistency in the Mercantilist Doctrine, as Pointed Out by David

question 84

Multiple Choice

An inconsistency in the mercantilist doctrine, as pointed out by David Hume, is that

• A) the volume of a country's imports increases as an indirect consequence of mercantilism.
• B) the exclusion of government influence in matters pertaining to trade is not ideal.
• C) in the long run, no country could sustain a surplus on the balance of trade.
• D) it was not backed by either sound political principles or social ideologies.
• E) trade is a zero-sum game rather than a positive-sum game as postulated by the theory.

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Definitions:

Earnings Rate

The rate at which an investment or savings account is expected to grow over a specified period, often expressed as a percentage.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculating the interest rate at which the net present value of all cash flows is zero.

Compound Interest

Accumulated interest calculation that includes both the principal amount and the interest that has been gained on it from previous periods for loans or deposits.

Cash Inflow

Represents money or cash equivalents being transferred into a company, coming from various sources like sales, investments, or financing activities.