The Way the World Changed

Mr. McCaskill

Columbian exchange Why do they call it the Columbian

Exchange?◦ Christopher Columbus’ arrival in the Americas

began the exchange of plants, animals, and diseases between the Old and New World that had previously only existed on one side of the Atlantic Ocean.

Columbian Exchange- The transfer of foods, plants, diseases, and animals during the colonization of the Americas.

Few events changed the world like the Columbian Exchange.

This global transfer of plants, animals, disease, and especially food brought together the entire world and touched, in some way, nearly all people of the world.

The Columbian Exchange

New wealth from the Americas was coupled with a dramatic growth in overseas trade.

These practices, many of which served as the root of today’s financial dealings, dramatically changed the economic atmosphere of Europe.

Global Trade

This new economy helps birth the growth of capitalism.

Capitalism- an economic system based on private ownership and the investment of resources for profit.

In capitalism governments are not the only owners of great wealth.

The Rise of Capitalism

As a result, businesses across Europe grew and flourished.

The increase of gold & silver led to an increase in many nations’ money supply.

This in turn brought on inflation.

Great ideas backfire!

At this time, the costs of many goods also rose. This created inflation.

Inflation- demand increases, but supply decreases.

Spain, for example, endured a crushing bout of inflation during the 1600s, as boatloads of gold and silver from the Americas greatly increased the nation’s money supply.

More Money, More Problems!

During this time, the nations of Europe adopted a new economic policy called mercantilism.

Mercantilism- a country’s power depends mainly on its wealth.

Wealth allowed nations to build strong navies and purchase vital goods.

As a result, the goal of every nation became to attainment as much wealth as possible.

The Growth of Mercantilism

Mercantilism1. Get as much Gold, Silver, and resources as you

can2. Sell more than you buy3. Get colonies to help with 1 and 2

Economic Changes

Mercantilism went hand in hand with colonialism, for colonies played a vital role in this new economic practice.

Colonialism- the control of a nation over a dependent country, territory, or people

In addition to playing the role of supplier, the colonies also provided a market.

Balance of Trade

Mercantilism contributed to the creation of a national identity.

The new economic practices helped expand the power of European monarchs, who became powerful rulers.

Economics Change Europe