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# Merchant Capital Employment Choices

# Merchant Capital Employment Choices

## Definition

The decision-making process by which merchants allocate their capital among different trade opportunities based on expected profits, risks, and market conditions. These choices determine the direction and volume of international trade flows.

## Source Chapter

Book IV, Chapter 6

## Context

Smith discusses how merchants make decisions about capital allocation in the context of trade restrictions and monopolistic arrangements. He argues that these decisions are primarily driven by profit considerations rather than mercantilist goals of national wealth accumulation.

## Economic Domain

Exchange

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