OVERVIEW OF NEW ECONOMIC SYSTEMS

• In what ways was the European use of credit in this period a continuation of older practices? In what ways was it a change?

  • The use of credit in Europe during this period continued older practices of financing trade and investments, which had been common in medieval and Renaissance Europe. However, the scale and complexity of credit usage increased significantly during this period due to the expansion of global trade and the emergence of joint-stock companies
• What was the impact of Fibonacci's book, according to the author?

  • fibonacci’s book helped advance europe
• Why was a bill of exchange useful?

  • they helped ppl give money to each other without exchanging cash and without having money in immediate hand
  • they could be sold or transferred to others
  • they were safer to to transport across long distances
• What financial innovation did the British East India Company and Dutch East India Company rely on?

  • they relied on the issuance of joint-stock and bonds as financial innovations. These companies allowed investors to buy shares in the company, spreading the risk of investment and providing capital for their ventures
• What was the economic role of colonies, for Europeans in this era?

  • Colonies provided a source of raw materials for European industries, such as sugar, cotton, and precious metals. Additionally, colonies served as captive markets for European manufactured goods, ensuring a steady demand for European products and contributing to economic growth and wealth accumulation in Europe
• Explain how rulers employed economic strategies to consolidate and maintain power throughout the period from 1450 to 1750.

  • These strategies included promoting mercantilist policies to increase state revenue, establishing monopolies over key industries and trade routes, exploiting colonial resources, and fostering economic alliances with powerful merchants and trading companies
• Why do you think the changes in financial and economic practices in European companies matter to world history in this period?

  These developments facilitated the expansion of European trade networks, colonization, and imperialism, leading to the integration of distant regions into a global economy dominated by European powers. Additionally, the rise of capitalism and the emergence of joint-stock companies laid the foundation for modern economic systems and institutions, shaping the trajectory of global economic development
• • credit is an agreement between a borrower and a lender that a loan will be repaid later
• • interest is what the borrower must repay in addition to the value of the initial loans
• • charging interest was banned by the christian church and other religious institutions 
• • non-christian groups tended to be the only ones who did interest since they were not apart of the churches
  • only increased discrimination against them
• • Fibonacci adapted ideas from Muslim and Hindu scholars, contributing to economic activity in Florence and Venice
• • Modern banks emerged in cities, facilitating trade networks
• • Banks developed the bill of exchange, similar to modern-day checks, to manage money without exchanging cash
• • Bills of exchange could be sold or transferred, making them safer for long-distance transactions
• • Banks began managing money on larger scales, including dealing with government debt
• • The Bank of England sold bonds to help pay for wars, which were like loans to the government with a promise to pay back the money plus extra later on
• • Joint-stock companies let many people split the costs and share the profits, so financial risks weren't as big for one person
• • More risky but potentially profitable businesses became popular
• • Companies became separate from individuals, so nobody had to bear all the financial risk alone
• • Stock markets started, making it simple to buy and sell shares in companies
• • More people could trade because of stock markets
• • things like sugar, pepper, and coffee were wah to expensive to import to europe. but under european imperialism, valuable commodities were consider raw materials. these raw materials were then turned into highly profitable finished goods
• • European countries competed for global resources and promoted mercantilist policies to expand their political power
• • Mercantilism focused on selling more than buying to increase a country's wealth and self-sufficiency
• • Colonies provided raw materials for European goods and new markets for finished products, benefiting Europeans but limiting trade for colonial inhabitants
• • The rise of the merchant class and middle classes in Europe was fueled by trade, leading to increased political power and the spread of Enlightenment ideas
• • Capitalism emerged gradually, with some European governments adopting laissez-faire policies allowing private companies to control the economy
• • Capitalists hired wage laborers to produce goods, keeping profits for themselves and expanding production on a large scale