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New Patterns of Trade

New Patterns of Trade. Chapter 16 Section 3. Key Terms. Columbia Exchange Mercantilism Balance of trade Subsidies Capitalism Joint-stock Joint-stock companies. The Columbian Exchange. Widespread exchange of plants, animals and disease between two groups

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New Patterns of Trade

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  1. New Patterns of Trade Chapter 16 Section 3

  2. Key Terms • Columbia Exchange • Mercantilism • Balance of trade • Subsidies • Capitalism • Joint-stock • Joint-stock companies

  3. The Columbian Exchange • Widespread exchange of plants, animals and disease between two groups • Plants and animals to develop differently • Europeans did not know potatoes, sweet potatoes, corn or turkeys

  4. The Columbian Exchange • People in the Americas did not know coffee, oranges, rice, wheat, sheep, or cattle • Introduction of beasts of burden (horses) • Only domesticated beast was a llama • Horse was a new source of transportation and labor

  5. Effects of the Columbian Exchange • Exchange of food and animals had a dramatic impact • Corn and potatoes became a staples in the European diet • Foods provided nutrition and people could live longer

  6. Effects of the Columbia Exchange • Cattle ranching in Texas • Coffee growing in Brazil would not have been possible • Cows and coffee came from the old world • Imagine Italian food without tomatoes • Some thought tomatoes were poisonous

  7. Effects of the Columbian Exchange • 1600’s they were in Italian cookbooks • Corn in China caused population to grow • China bought a lot of U.S. silver • Corn and peanuts grow in Africa • One third of all food crops grown came from the America

  8. The Introduction of new Diseases • Diseases brought by the Europeans • Diseases killed millions • Smallpox • Measles • Influenza • Malaria • Few diseases were introduced to Europe

  9. The Introduction of New Diseases • 1518 half the population of Santo Domingo died of smallpox • Mexico’s population decreased by 30% in 10 years • Inca’s decreased from 14 million to 2 million

  10. Mercantilism • 1500’s new type of economy • Mercantilism – the nation’s strength depends on its wealth • Had power to build a strong military • Wealth measured y the amount of gold and silver one had

  11. Mercantilism • One nation got wealthier by taking away items from another • Led to intense competition between nations in the 1500’s and 1600’s

  12. Balance of Trade • Build wealth in two ways • Extract gold and silver • Sell more items than you buy • This strengthened their country while weakening another • Favorable balance of trade was essential

  13. Balance of Trade • Reduce the amount of goods imported • Place tariffs on goods imported (adds to the cost) • Imported goods became more expensive (discouraged people to buy) • Sell exports for high prices

  14. Balance of Trade • Manufactured goods sold for more than raw material (woolen cloth vs. raw wool) • Subsidies-governments provide grants of money to help start a new business • Control oversee sources of goods

  15. Balance of Trade • Foreign country were looked at as rivals • At any time they could cut off resources • European nations worked to become self sufficient

  16. Colonies • Building of colonial empires essential mercantilist system • Control sources of raw materials • Provide new markets for manufactured goods • Colonies could only sell to home country • Colonies only existed to benefit the home country

  17. Impact on Society • Towns and cities grew as business increased • Wealthier merchants arose • Wealthy merchants enjoyed mobility • Most people are still poor

  18. Capitalism Emerges • Most economic activity is carried on by the private individual or organization for profit • Individuals not governments amass great fortunes • Merchants supply colonies with goods from Europe

  19. Capitalism Emerges • Brought back raw materials and products from the Americas • Overseas trade made wealthy merchants • Business activity in Europe increases

  20. Rising Prices • Investors took risks and invested overseas • Demand drove up prices • Increase of money supply in Europe caused increase • Shiploads of gold and silver flowed to Europe from America

  21. A New Business Organization • Joint-stock companies- investors began to pool their money to fund even larger businesses • Investor bought shares • If company achieved a profit they all shared • Based on number of shares

  22. A New Business Organization • If company failed investors only lost the cost of their shares • British East India Company- first joint stock company • Founded in 1600 to import spices from Asia

  23. Other companies formed because of the expenses of forming a new colony • The Virginia Company of London established the first successful colony in America • Jamestown Virgina

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