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1、F86E 35 Economics2: The World EconomyEconomics2: The World EconomyF86E 35Candidate Name: REN LUGrade and Class: 2013 BA1Introduction21. Free trade32. Absolute advantages and comparative advantages33. The benefits of free trade44. The purpose of carrying out trade protectionism55One Mechanism of the
2、World Trade Organization66. One measure of European Union promotes economic integration87. Balance of payments98. The general trends in UK trade over the last 30 year109. The balance of payments affected by exchange rates1210. Advantages and disadvantages of fixed rate and floating rate1311. Effects
3、 of fixed rate and floating rate on individuals and company1512. The characteristics of the newly industrialized countries and the developing countries1613. The issues of the newly industrialized countries and the developing countries1714. The influences Multi-National Corporations bring to newly in
4、dustrialized countries.18Conclusion19Reference20IntroductionThis report has introduced the world economics simply. The content includes: International trade, free trade, Protectionism, the role of WTO and under-developed nation, UK absolute and comparative advantage, the protectionism and two recent
5、 examples about demonstrate arguments which government may put forward for its use, two barriers of trade, a EU initiative about the role of the EU in promoting trade, the composition of the balance of payments, the general trends in UK trade over the last 30 years, the way which the balance of paym
6、ents affected by exchange rates, an analysis of two current issues that face LDCs, and the aid of recent examples about two impacts of multinationals on NICs and LDCs.I. Free trade(1). Free trade is a type of trade policy that allows traders to act and transact without interference from government.
7、Thus, the policy permits trading partners mutual gains from trade, with goods and services produced according to the theory of comparative advantage. China-ASEAN free trade area was formally established in January 1, 2010, covering a population of 1900000000. China-ASEAN free trade areas GDP amounte
8、d to $6 and trade amounted to $4.5. It is the largest free trade zone among developing countries.After the establishment of CAFTA, more than 90% products are carried out for zero tariffs on both sides. Average tariffs from Chinese to ASEAN decrease from 9.8% to 0.1%, Average tariffs from ASEANs six
9、old members to Chinese decrease from 12.8% to 0.6%. Tariffs huge reduction promoted the rapid growth of bilateral trade.China and ASEAN countries trade investment grows, economic integration deepens, companies and people are widely benefit, realizing goals of mutual benefit and win-win cooperation a
10、nd common development. China and ASEANs total quantity of bilateral trade grows rapidly. From January to October this year, the bilateral trade volume has reached to $295900000000, a year-on-year growth of 25.7%.(2). Absolute advantages and comparative advantagesAbsolute advantages is said to occur
11、when one country can produce a good or service to pre-determined quality with less resources or more cheaply than another country.Even when a country has an absolute advantage over another country in terms of commodities they wish to trade it will still be to their mutual advantage to trade providin
12、g each country has the comparative advantages. UK is a major importer of manufacturing goods such clothes, shoes, toys, electronic produces etc. as these labor oriented consumer goods will cost more in UK before 1980s. UK has the With the development of service, the advantage of trade is service tra
13、de. The goods that courtry import and export change over time as the goods in which they have a comparative advantage change over time. Before 1970s, manufacturing industry is its absolute advantage. After 1970s, service industry is more competitive for international trade such as computer software,
14、 business service and pharmaceuticals. These industry are seen to bring the possibility of long term growth, while the industries based on heavy capital investment or requiring relatively cheap labor will not be competitive with developing countries.2. The benefits of free trade(1). Goods and servic
15、es produced at lower cost. Free trade can promote the cooperation of different countries in the world. It can decrease the cost of producing goods.(2). Greater range of commodities for consumers, more choice. Any countries cannot produce all products, they all have products which are unable to produ
16、ce. Trade allow us to buy all of them. Greater range of commodities provide customers with more choice.(3). Increased world-wide output. Each country producing according to their respective advantages has high efficiency. Under the same resources, it has high yield. Therefore, international trade increased world-wide output. 3. Barriers to International TradeT
