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Productive capacity

After the Spanish found the new world, they promptly began to plunder this. They imported huge amount of gold and silver to Spain. It inflow of bullion caused a rapid increase in inflation, that would have grave consequences for Spain. It is quick inflation made this cheaper for the Spanish to buy goods from France and England. It eventually caused what to occur?: (i) the productive capacity of Spain not to develop to similar extent as France and England. (ii) Spain to outpace other European nation in phrases of production capacity. (iii) Spain to see instantly the faults of mercantilism. (iv) prices of goods produced within Spain to go down.

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