The paper "Incident Command System, Mercantilism Concept " is a great example of a macro & microeconomics essay. The mercantilism concept is a regressive concept in the economic development of any country and the whole world. The concept emphasizes wealth retention by the use of tariffs and restrictions in order to discourage imports and encourage export, therefore, increasing their foreign reserves accounts since there will be less or no money lost to foreign investors (Allen, William R. 1987). Countries that practice mercantilism always places more emphasis on expensive natural resources such as Gold and therefore, it should be discouraged due to restriction that might create monopoly issues and provision of substandard products.
Also, this type of trade concept inhibits the economic growth of any country practicing the same since there are low competition and reduced market where producers sell their product internationally. For this concept to be successful, the country should employ various trade tools and policies in order to regulated import and export trade with other countries. These policies include; Administrative barriers This concern with the process required for a foreign investor to sell is good in the domestic market.
This a common tool used by various countries to regulate imports since if they would like to reduce import, the country will lengthen the procedure or involve a lot of procedures and delay in granting the investor license to import his products to another country. Therefore, for mercantilism to succeed country should make procedures followed by importers is made lengthy and tiresome thus discouraging importers' attempt to import their products into the domestic market. Tariffs Tariffs are the common policy used by various countries in trade protectionism.
This is where a country imposes a certain level of tax on import or export products depending on the intention of the country’ s trade effect on the economy. For mercantilism, the government will increase taxes on imports, therefore, increasing prices of foreign products compared to locally produced products of the same kind therefore, reducing demand on imported goods this in return reduces profit to foreign investors hence withdrawal from the market or discouragement from entering the market.
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