The correct answer is A: Colonies existed primarily to enrich the mother country through trade
Mercantilism is an economic theory in which a nation seeks to increase its wealth and power by controlling trade, accumulating precious metals, and exploiting colonies. Under this system, colonies provided raw materials to the mother country and served as markets for manufactured goods. The focus on favorable trade balances and resource extraction aimed to strengthen national power and economic self-sufficiency.

Why the other options are incorrect:
B. Governments should avoid regulating trade and let supply and demand set prices
This describes laissez-faire or free-market economics, not mercantilism. Mercantilism emphasizes strict government regulation to maximize national wealth. Allowing unregulated trade contradicts the core principles of mercantilist policy, making this option incorrect.

C. Wealth grows when money is invested in new industries
This idea aligns more closely with capitalism and industrialization, where investment drives economic growth. Mercantilism focuses on trade surplus and accumulation of wealth through controlled commerce, rather than industrial investment, so this option does not accurately describe the theory.

D. Businesses operate most efficiently without government interference
This statement reflects free-market economic thought, which opposes mercantilist principles. Mercantilism relies heavily on government control of trade, tariffs, and colonial exploitation. Since the theory is based on regulation rather than economic freedom, this option is historically inaccurate.

Explanation