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World Economics assignment. The core economic issues that are focused on in this report are trade, international payments, exchange rates and economies undergoing change.

Extracts from this document...

Introduction

Unit Title: Economics 2: The World Economy Candidate Name: Tong Yin Student ID: 095359906 Tutor: Lu Wei Title of the Project: Report for Economics 2: The World Economy Word Count: 2369 Date of Submission: 8 January 2011 Table of Contents Introduction 4 Procedure 4 Analysis on Element 1 5 Analysis on Element 2 6 Analysis on Element 3 7 Analysis on Element 4 8 Analysis on Element 5 9 Analysis on Element 6 10 Analysis on Element 7 10 Analysis on Element 8 11 Analysis on Element 9 12 Analysis on Element 10 13 Analysis on Element 11 14 Analysis on Element 12 15 Analysis on Element 13 16 Analysis on Element 14 17 Analysis on Element 15 18 Summary 18 Reference 20 Introduction In this report, it will introduce the World Economy. Main focus is the key feature of the global economic environment. The core economic issues that are focused on in this report are trade, international payments, exchange rates and economies undergoing change. Procedure To gather the required information to produce this report, extensive usage of the internet, various search engines and university library to understand global economics theory and current affairs. Analysis on Element 1 Firstly, international trade increased word-wide output. International trade activities have develop and explore the comparative advantages of a country, meanwhile, boost the professionalism of industries, higher efficient because of this. If the world-wide output is enhanced and comparative advantages are well-exerted, producers can obtain benefits of economies of scale, accordingly, the cost will descend and profit ascend. Secondly, it provides greater range of commodities for consumers and more choice. Customers coming from varied counties could buy commodities which are not produced domestically by the means of international trade. It contributes to enlarging purchasing market. Since, no matter the similar types of products or goods that not are able produced in domestic area, they could be got through international trade. ...read more.

Middle

Further, move towards full economic and monetary union. Lastly, develop common foreign, security and defense policy(15). In respect of trade, EU has encouraged to use one single currency which promotes the development of trade. Regarding to administration, the applying of Schengen Visa decrease administrative impediments and encourage the flow of individuals and business. Moreover, it implements unified foreign policy when confronted with trade disputes. Analysis on Element 8 The Balance of Payments can effectively be broken down into two parts. According to the webpage, "The Current Account records international trade in goods and service, international income flows and current transfers. The Capital Account and Financial Account form the counter part to this, recording the changing pattern in the international ownership of assets. While the Financial Account records changes in the cross-border flows of assets the international Investment Position measures the total stocks of foreign assets and liabilities held by a nation(16)." The trade in goods balance is the difference between the value of goods exported and the value of goods imported. The trade in services is recorded in the same way, with credits to the Current account reflecting services exports and debits services imports. Net income flows reflect international payments associated with the ownership of the factors of production (land, labor and capital). Current transfer records a miscellaneous set of net payments including workers remittances, social security, foreign aid and contributions to international organizations(17). In 2009, the current account deficit stands at�15.5 billion. The deficit of trade in goods account falling to�81.9 billion. The trade in services account has shown a surplus of �49.9 billion. The investment income balance rose to a record level of �32 billion. The deficit of transfers account reached a record of �14.8 billion. Additionally, The capital account represented in �3.2 billion and financial account had a net inflow of �5.6 billion(18). Analysis on Element 9 According to the bar chart of trade in good and trade in services, the UK trade was fluctuated over the last 30 years. ...read more.

Conclusion

The benefits have increase employment, the new methods and technology and contribute to economic growth, to name just a few. At the same time the problems have which may eliminate domestic competition, occupy the local nature resources and the profits are mainly transfer back to Home County(29). Volkswagen as the first group company into Chinese marketing, they merger the Shanghai automobile firm and established the Shanghai Volkswagen Company. The professional training designed for Chinese worker brought in the updated technology and management skills. The other instance is about Samsung Electronics. The organization install their manufactory in developing countries like India, it may use up the natural resources and give extreme detrimental environmental influences on host country. Summary All those are the 15 key elements about the world economy. At present, the global economy tends to integration, so to realize world economy is very necessary for countries, businesses, and even individuals. Reference (1) http://en.wikipedia.org/wiki/Free_trade (2) http://en.wikipedia.org/wiki/Latin_American_Integration_Assosiation (3) http://en.wikipedia.org/wiki/Absolute_advantage (4) http://en.wikipedia.org/wiki/Comparative_advantage (5) http://en.wikipedia.org/wiki/Protectionism (6)http://www.cbsnews.com/stories/2010/09/27/business/main6904479.shtml (7)http://domesticfuel.com/2010/04/06/brazil-eliminates-tariff-on-ethanol-imports/ (8)http://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp (9) Economics 2: The World Economy by China Mordern Economic Publishing House Page34. (10) http://en.wikipedia.org/wiki/Non-tariff_barriers_to_trade (11) http://www.nytimes.com/2010/09/27/business/global/27yuan.html (12) http://www.mysanantonio.com/business/local/article/Mexico-s-new-tariff-list-may-hurt-Texas-621156.php (13) http://www.wto.org/english/res_e/doload_e/inbr_e.pdf (14) http://trade.ec.europa.eu/doclib/docs/2007/may/tradoc_134652.pdf (15) Economics 2: The World Economy by China Mordern Economic Publishing House Page 66. (16) http://en.wikipedia.org/wiki/Balance_of_Payments (17) http://www.statistics.gov.uk/elmr/09_09/downloads/ELMR_Sep09_Chamberlin.pdf (18) United Kingdom Balance of Payments - The Pink Book (19) United Kingdom Balance of Payment-The Pink Book (20) http://en.wikipedia.org/wiki/Exchange_rate (21) Economics 2: The World Economy by China Mordern Economic Publishing House Page 91and 92. (22) Economics 2: The World Economy by China Mordern Economic Publishing House Page 103. (23) Economics 2: The World Economy by China Mordern Economic Publishing House Page 103. (24) Economics 2: The World Economy by China Mordern Economic Publishing House Page 112. (25) Economics 2: The World Economy by China Mordern Economic Publishing House Page 113. (26) http://en.wikipedia.org/wiki/Least_Developed_Country (27) Economics 2: The World Economy by China Mordern Economic Publishing House Page 134 and 135. (28) Economics 2: The World Economy by China Mordern Economic Publishing House Page 139. (29) Economics 2: The World Economy by China Mordern Economic Publishing House Page 148-149. ?? ?? 1 ...read more.

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