世界经济最终稿.docx

IntroductionThis section one report is mainly expressed the EUs awareness and understanding, but also explains the benefits of EU countries, each countrys contribution to the Allies, the EU contribution. The section two report I mainly about the UK for 30 years and the balance of trade in determining the relationship between this, the will to understand the specific circumstances of a floating exchange rate, and finally to understand he is under a floating exchange rate impact of economic agents.Free trade the absolute and comparative advantages.Free tradeNow sometimes termed international Trade, had the original intention that goods and services could be exchanged freely between countries with no barriers to this exchange.Absolute advantage and comparative advantagesAbsolute advantage is said to occur when one country can produce a good or service to a pre-determined quality more cheaply than another country. The theory of comparative advantage was first described by DavidRicardo. 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 providing each country has a comparative cost advantage. It stands contrasted with the concept of comparative advantage which refers to the ability to produce a particular good at a lower opportunity cost.Opportunity cost is defined as the cost of choosing a good or service measured in terms of the next best alternative given up. A country has a comparative advantage in producing a good if the opportunity cost of producing that good in term of other goods is lower in that country than it is in other countries.An example:: Korea and Japan have following production possibilities for two commodities, mobile phones and computers; assume that all the resources owned by each country are same.Mobile phoneComputerJapan200020000Korea100015000It is clear that Japan has an Absolute advantage over Korea in both commodities. But the advantage