HND-Economics-The-World-Economy世界经济学报告

Economics2:TheWorldEconomyWorldEconomy2ContentIntroduction----------------------------------------------------------------3Section1:InternationalTradeThreegainsfromtradinginternationally---------------------------------------3FreeTrade--------------------------------------------------------------------------3AbsoluteandComparativeAdvantage-----------------------------------------3Protectionism----------------------------------------------------------------------4Barrierstotrade-------------------------------------------------------------------4WTOandEU----------------------------------------------------------------------5Section2:InternationalFinanceBalanceofPaymentsandGeneraltrendsinUKTrade----------------------6Relationshipbetweentheexchangerateandthebalanceofpayments—14SingleCurrency------------------------------------------------------------------15EffectsonindividualsandbusinessoftheEuro-----------------------------15Section3:LessDevelopedCountries(LDCs)CharacteristicsofaLDC--------------------------------------------------------16CurrentissuesthatfaceLDCs--------------------------------------------------16TheimpactsofmultinationalsonLDCsandNICs--------------------------16Conclusion-----------------------------------------------------------------16References------------------------------------------------------------------17Introduction:WorldEconomy3AsamemberofthegovernmentofnationontheperipheryofEurope,itismyobligationtoillustratethebenefitsofjoiningtheEUtothePremier.Inthisreport,Iwillanalyze15elementsinnextthreepartstomakeaclearexplanationofbenefitsofjoiningtheEU.Section1:InternationalTradeThreegainsfromtradinginternationally:Tobeginwith,theinternationaltradecouldincreaseworldout-put.Thetendencyofglobalizationbringsthefirmsmoreopportunitiestogainthelabor,resources,contractsandnewtechnology.Thesupplyanddemandwillbeimprovedwiththeimprovementofcompany’sproductivity.Oncethesupplyhasbeenimproved,thegoodsandserviceswereproducedatlowercostandtherearemoreandmorecompetitions,thepriceoftheproductmightfallwhichmeansconsumerscouldgetmorechoicesandcheapergoods.Inaddition,themostimportantgainingofinternationaltradeisitcangenerateeconomicgrowth.Freetradecouldincreasesales,profitmargins,andmarketsharesandthebothdemandandsupplylevelhasupdated.Meanwhile,theproducerneedsmoreresources,laborandcapitaltoproducemoretosatisfytheglobalmarket.Itdirectresultinimprovingthematerialmarket,financemarket,andmaydeclinetheunemploymentrate.FreetradeFreetradeisaconceptthatthereisnobarriertogoodsandservicesexchangedbetweencountries.Sincedifferentcountrieshavedifferentterrain,weather,resourcesandtechnology,theinternationaltradewouldbringthegoodswhicharemorevaluablethanthelocalpeopleproduceitbythemselves.AgoodexampleforfreetradeisinNov.18,2004,ChinesePresidentandChileanPresidentdeclaredthestartoftheFTAnegotiations.Accordingtotheagreement,thetwocountrieswouldstarttariffreductionofgoodstradefromJuly1,2006.Tariffofproductsaccountingfor97%ofthetotalofthetwocountrieswouldbezerointenyears.ChinaandChilewouldcarryoutfreetradeineducation,science&technology,environmentprotection,labor,socialsecurity,IPR,investmentandpromotion,mineralandindustry.ThisagreementhaspromotedthefreetradebetweenChinaandChilesuccessfully.AbsoluteandcomparativeadvantageAbsoluteadvantagereferstotheabilityofaparticularpersonoracountrytoproduceaparticulargoodwithfewerresourcesthananotherpersonorcountry.Absoluteadvantageissaidtooccurwhenonecountrycanproduceagoodorservicetopre-determinedqualitymorecheaplythananthercountry.ItstandscontrastedwiththeconceptofcomparativeadvantagewhichreferstotheabilitytoproduceaparticularWorldEconomy4goodataloweropportunitycost.Opportunitycostisdefinedasthecostofchoosingagoodorservicemeasuredintermsofthenextbestalternativegivenup.Acountryhasacomparativeadvantageinproducingagoodiftheopportunitycostofproducingthatgoodintermofothergoodsislowerinthatcountrythanitisinothercountries.Example:KoreaandJapanhavefollowingproductionpossibilitiesfortwocommodities,mobilephonesandcomputers;assumethatalltheresourcesownedbyeachcountryaresame.MobilephoneComputerJapan200020000Korea100015000ItisclearthatJapanhasanAbsoluteadvantageoverKoreainbothcommodities.Buttheadvantageithasismuchgreaterformobiles.UsingthesameresourcesasKoreaitcanmaketwiceasmanymobilephones.ForJapanthe‘cost’of1Mobilephoneis10balesofComputers,i.e.20000/2000ForKoreaitis15,i.e.15000/1000ButifwelookatthecaseofcomputerswewillfindthathereforJapanthecostofabaleofcomputersisone-tenthofaMobilephonewhileforKoreaitisonefifteenth.IntermsoftheoutputofMobilephoneforegone(opportunitycost),computerischeaperinKoreathanJapan.KoreahasaComparativeadvantageincomputerwhileJapanhascomparativeadvantageinmobilephone.ProtectionismProtectionismistheeconomicpolicyofrestrainingtradebetweennations,throughmethodssuchashightariffsonimportedgoods,restrictivequotas,avarietyofrestrictivegovernmentregulationsdesignedtodiscourageimportsandanti-dumpinglawsinanattempttoprotectdomesticindustriesinaparticularnationfromforeigntake-overorcompe