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1) Price Revolution. Why would this impact prices?. Why would this impact prices?. Cause: Population Increase?. Cause: Precious Metals from New World. Effects. -increase in food prices. -more people here and abroad = new market. -stagnant wages. -cheap labor.

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1) Price Revolution

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1 price revolution

1) Price Revolution

Why would this impact prices?

Why would this impact prices?

Cause: Population Increase?

Cause: Precious Metals from

New World

Effects

-increase in food prices

-more people here and abroad = new market

-stagnant wages

-cheap labor

-government borrowed heavily from bankers—raised taxes to pay it back

-increased rents

-more money for merchants

Which factor of the price revolution will have the greatest impact on the economy? Why?


1 price revolution

-How will the opening of the Atlantic for trade integrate European trade?

-Why will it also make Europe more vulnerable to shifts in price?

2) Triangular Trade 16-19th Century


1 price revolution

2) 16thCentury European Trade Centers

Area of Trade

Area of Trade

Area of Trade


1 price revolution

3) Joint-Stock Companies

A joint-stock company is a business which is owned by multiple people (shareholders). Each shareholder invests a sum of money into the company and receives a certain percentage of shares for his or her investment. This allows for the unequal ownership of a business with some shareholders owning a larger proportion of a company than others. Shareholders are able to transfer or sell their shares to others without any effects to the continued existence of the company. Each shareholder receives a share of the profits which correspond to his or her share in the company. During the period of colonialism, Europeans, initially the British, trading with the Near East for goods, pepper and calico for example, enjoyed spreading the risk of trade over multiple sea voyages. The joint-stock company became a more viable financial structure than previous guilds or state-regulated companies

Examples:

1600-British East India Company (British monopoly on trade in East Indies and later India)

1602-Dutch East India Company (Dutch monopoly on trade activities in Asia)

1606-Virginia Company of London (Jamestown)

1606-Plymouth Company (Plymouth colony, Pilgrims)

-What is a joint-stock company?

-How would this revolutionize the European economy?

-How would this impact exploration and colonization?


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4) MERCANTILISM---Read and annotate

(1)Bullionismwas the belief that the wealth of a nation could be measured by the amount of precious metal, gold, or silver, it possessed. This form of currency came to be used in the daily economy; taxes were collected from the colonies to support this source of prosperity, prestige, and strength.

(2) Favorable Balance of Trade That is, for a nation to have gold on hand at the end of the year, it must export more goods than it imports.

(3) Economic Self-Sufficiency Those who created new industries (businesses) should be rewarded by the state because this would create more opportunities to increase exports.

(4) Regulated commerce This was used to produce a favorable balance of trade. The mother country could set high taxes on goods coming from other countries or prohibit colonies from trading with other countries. This made the goods of the mother country always cheaper.

(5) Sea power This was necessary to control foreign markets. A powerful merchant fleet would remove the need to use the ships of another nation making you more independent. In addition, a fleet added to a nation's status and military power.

(6) Captive Markets Colonies were forced to buy manufactured goods from the mother country and provided sources of raw material to the mother country.

(7) Population A large population in the colonies was needed as a labor force to provide the raw materials that would be shipped back to the mother country.


1 price revolution

4) Mercantilism in Practice

Navigation Acts (1660)-British Colonies can only use British ships -British Colonies can not manufacture goods produced by Great Britain-British Colonies can't sell raw materials to foreign countries-British Colonies must buy manufactured goods from England

_______________________________________________________________________

-How were the Navigation Acts an example of mercantilist policies?

-What is the ultimate goal of mercantilism?

-Are mercantilist economic policies still in practice today? Explain?


1 price revolution

6) Trade as Conflict

“The Trading Companies are armies of the King and the manufactures of France, his reserves…commerce causes a perpetual conflict in peace and war between the nations of Europe, which the best party will win.”

-Jean Baptiste Colbert, French economist and minister to King Louis XIV

-What does this quote mean?

-What predictions can be made about the impact that global trade will have on European politics?


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