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1. Mercantilism
2. Capitalism

laissez-faire

Colonies cannot manufacture goods

Government stays out of the economy

Colonies must trade with mother country

Colonies provide gold and silver

Supply and demand determine price (free market economy)

Adam Smith argued for this

Mother country controls trade

Colonies are a source of raw materials

Means of production are privately owned by individuals

System that profits individual entrepreneurs

Balance of trade favors the mother country