2. Social Changes
 Not everyone was affected equally
 Nobles saw a decline in their position as a class
 Inflation cut into nobles wealth
 Peasants in Western Europe had bought their freedom
 Noble declined allowed for other classes to gained status
 Nobles money was ending in the hand of middle class
merchants
 The alliance with kings and middle class made the kings
the only ones with wealth
 Some powerful influential nobles remained
 some had to work for kings in their armies or in the courts

3. Economic Revival
 Based on agricultural revival
 Climate improved during this period
 The revival had three effects that combined
to create a new economic system,
capitalism
 Population growth
○ Amount of trade and money increased
 New consumer markets
 New trade routes

4. New business techniques
 Because of so much trade new techniques were
created to handle money
 Joint stock accounts
 Allowed people to be able to take part in business
enterprises, like merchant expeditions
 Insurance companies
 Reduced the risk of losing peoples investments
○ therefore encouraged people to invest
 Deposit banks and credit
 Gave bankers money to invest in businesses
 Credit allowed bankers to have interest when they had to
pay money back

5. Capitalism
 Capitalism: is an economic activity that involves
using large sums of money or capital in large-scale
commercial, manufacturing, or agricultural
activities.
 Private ownership of the means of production
 The law of supply and demand determines prices
 There is a sharp distinction and often little contact
between the workers and the capitalist who owns
the means of production
 The profit motive