The Impact of Exploration on European Economies

1. How does a market economy grow?

1.1. Once people had more money they could buy and sell things.

1.2. If a product was in high demand and there was not much of a supply then the product would be expensive.

1.3. A market economy happens when prices are determined by supply and demand.

2. What is mercantilism?

2.1. Countries thought the best way to build power was to save money.

2.2. To do this, they increased exports and decreased imports.

2.3. They also established colonies in other places to get even more money.

3. How did exploration help capitalism?

3.1. Capitalism is an economic system based on investment of money for profit.

3.2. More exploration led to more trade, which gave people money to invest in companies.

4. What is the cottage industry?

4.1. Merchants hired many people to turn raw materials into products.They worked in a cottage, or a home.

4.2. Lots of products were created this way.