Mercantilism is the economic system established between a colony and a colonial power, where the natural resources found in the colony are used in the mother country to produce complex goods. An example of this would be how a colony would be advised not to create oil refineries to refine the oil into gasoline. This would mean that gasoline, the product of refined oil, would be imported to the colony once refined elsewhere. Thus, they would depend on foreign economic activity to meet local needs.
