QUESTIONS AND PROBLEMS 5. Briefly explain why the ideas of Smith and Hume were so devastating to Mercantilist thinking and policy 6. The following table shows the hours of labor required to produce 1 unit of each commodity in each country: 1. Why did the Mercantilists consider holdings of precious metals so important to nation-state building? 2. What were the pillars of Mercantilist thought? Why was regulation of the economy so important? 3. What is meant by the "paradox of Mercantilism"? How was this reflected in Mercantilist wage and population policies? 4. What are the critical assumptions of the price-specie-flow mechanism? What happens to the trade balance in a sur plus country if the demand for traded goods is price inelas tic? Why? Wheat Clothing United States United Kingdom 3 hr 4 hr 9 hr 4 hr