Differentiate mercantilism from early capitalism.

• A. Mercantilism emphasized private property and market-based exchange.
• B. Mercantilism emphasized state control of trade and wealth accumulation; capitalism emphasized private property and market-based exchange.
• C. Capitalism emphasized the state's central planning.
• D. Mercantilism promoted free trade with minimal government involvement.

Answer: (B)

The main idea being tested is how economic systems differ in who controls trade and wealth versus how property and markets operate. Mercantilism is about the state's role in shaping the economy to build national power and wealth, often by controlling trade, encouraging exports, limiting imports, and accumulating precious metals. The government uses tariffs, regulations, and even monopolies to boost the country’s stock of wealth and its power.

Early capitalism, on the other hand, centers on private property and market-based exchange. Individuals and businesses operate in competitive markets to earn profits, invest capital, and grow wealth through voluntary transactions. The government's role is typically limited to enforcing contracts and protecting property rights, not directing economic activity.

So the statement that best captures the distinction is that mercantilism emphasizes state control of trade and wealth accumulation, while capitalism emphasizes private property and market-based exchange. The other descriptions don’t fit this contrast: mercantilism is not defined by private property and markets, capitalism isn’t characterized by state-planned economies, and mercantilism did not promote free trade with minimal government involvement.