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1、I.IntroductionThisreportintroductionsomeeconomicsabouttheworldeconomyincludingfreetrade,exchangerate,balanceofpayment,NICandLDCandsoon.Inthisreportiwillanalyze14elementstomakeaclearexplanationaboutworldeconomy.II.Text1.Explainfreetradeincludingthetheoryof
2、absoluteadvantageandcomparativeadvantageFreetradehadtheoriginalintentionthatgoodsandservicescouldbeexchangedfreelybetweencountrieswithnobarrierstothisexchange.Trans-PacificPartnershipAgreement,orTPP,asit’smorecommonlyknow.12countrieslikeAmerica,Japan,Aust
3、ralianandsoon,theyreachonagreementaboutTPPon5thofOctoberin2015.BetweenTPPmembers,theproductsandservicepricewilldecreaseandlogisticsspeedwillincrease.Addthe12countrieswhichaccountsfor40%oftheglobaleconomy.TheTPPwillreduceordecreasetariffon18000categoriesof
4、products.Absoluteadvantageissaidtooccurwhenonecountrycanproduceagoodorservicetoapre-determinedqualitywithlessresourcesthananothercountry.Thebenefitoradvantageofaneconomytobeabletoproduceacommodityatalesseropportunitycostthanotherentitiesisreferredtoascomp
5、arativeadvantageininternationaltradetheory.In1970s,manufactureindustrytakeuplargeproportioninUK,itsmanufactureindustryhasabsoluteadvantage.However,itsindustrybegantransfertooverseasfrom1980s.Particularlymanufactureindustry,UKenvironmentbecomeverybadduotom
6、uchmanufactureindustry,soUKgovernmentdecideclosesomedomesticfactoryandinvestFinancialindustry.Financialindustryrosesharplybaseonthisopportunity.Financialindustrydon’thavetocausepollution,anditsprofitabilityalsoverygood.1.Identifythreegainsfrominternationa
7、ltradeFirstofall,goodsandservicescouldexchangefreelybetweencountrieswithnobarrierstothisexchange.Andthegoodscandecreasecost,andthatcanincreaseemploymentrateandrosetheeconomicinthelocalarea.Second,Internationaltradecanimproveglobalproductivitybecausethatca
8、nuseabsoluteadvantageandcomparativeadvantagetomakecostdeductionandafterthattheproductivitywillincrease.Third,Internationaltradecustomercangetmoreproductsfromothercountries,andlowproductcostcanmakethegoodsbecomemorec
