Depending on exchange rate

Depending on exchange rate

The means by which the government controlled its costs to monitor or influence the economy is called fiscal policy. It is a strategy, along with monetary policy, which controls the money supply by the central bank.

Fiscal policy is based on Kejnzijanska economics and theories which states that governments can control economic productivity by keeping an eye on taxes and public spending. This process automatically curbs inflation levels, however, maintain the value of money and generating employment opportunities.

The role of economists because the government is not limited to implement these theories, but to find a balance in which they will yield the best results in the given economic scenario. For example, if money supply increases, demand will increase, resulting in devaluation of money. This means that a citizen should pay more money for a good that is not really changed their worth or value. This balance is very important for every economy - strong or weak, to maintain consistent growth rate.

Reduction of taxation is a method of government to effectively use them to pump its economy. This will result in less commitment and more money to encourage consumption. Spending in turn increases demand and the economy gets moving again.

Exchange rates on the Forex market is very sensitive to government policy and announced in particular in view of their economies. These reports and statements should be interpreted correctly in order to have accurate and decisive to the future prospects currencies. All information concerning these reports should be assimilated in an organized way to reach practical and logical buy / sell decision.

The index of economic factors affecting the float of the currency, joining with the foreign trade volumes, which will further strengthen the currency values ​​in the Forex market. These indicators or measures taken by any government would give a trader Forex insight into future trends in the currency of the country where it will assist in making a decision on buying or selling, as their needs and decisive powers.



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