Թեմա - Dram exchange rate fluctuations (changes) on the domestic price level (CPI) in Armenia
Տեսակ - Կուրսային, անհատական և ստուգողական աշխատանքներ
Գին - 7500 դրամ
Առարկա - Անգլերեն լեզվով
Էջեր - 30
1.The concept of dram exchange rate, the factors, theories affecting it
2.The ways through which dram exchange rate fluctuations influence consumer price index
Conclusion
The role and importance of national currency exchange rate is highlighted in the present conditions of the rapid development of international financial and currency market, of expansion of foreign economic relations of developing countries. Currency exchange rate has an impact with different ways and mechanisms on a number of macroeconomic indicators, on the activity of economic entities, as well as on solvency of individual citizens, accordingly on their living standards and social status.
The living standards of population are characterized by various indicators. According to UNOs methodology, it is suggested to rely on the following 12 group indicators for the assessment of the living standards of population: birth rate, mortality rate and other demographic indicators, sanitary living conditions, food consumption, housing conditions, education and culture, working conditions and employment, income and expenses of population, cost of living and consumer prices, means of transport, organization of rest, social security, human freedom. Besides these main indicators characterizing the living standards, a number of informational indicators are separated, such as the indicator of GDP per capita of population and the indicator of national income, consumption volume per capita of population.
National monetary system is a form of organizing the country’s monetary relations, which is historically formed and embodied with national legislation. The basis of any monetary system is the monetary unit defined with the countrys law, which becomes currency in international economic relations. The currency is a monetary unit, means for measuring the value of goods and services used in international economic relations in the forms of banknotes, bills, bank deposits, promissory notes, checks.
The Central bank keeps money supply stable in level Ms0 in [tot₁] time interval, in conditions of which interest rate (r0), price level (P0) and currency exchange rate (E0) remain stable. The Central bank increases money supply up to M₁ level at t₁ moment of time (graph 1 a). As a result of it, the interest rate, being more flexible price, shows hyper reaction too and falls to r₁ level with more amount, than the growth of money supply (graph 1 b), but then returns its initial balanced level. Being less flexible, the price level of products starts to increase until it reaches new balance level increasing as much as money supply has increased (graph 1 c).
So, by saying consumer price index of Republic of Armenia, we understand the change of the value of actually fixed goods and services obtained for the private consumption of population over time and space. As a macroeconomic index, it is affected by various factors, dram exchange rate fluctuations is one of the most important of these factors.
The exchange rate is the value of currency of one country expressed by the currency of another country. Based on the International Monetary Fund, we differentiate floating, fixed and mixed types of exchange rate. The exchange rate is affected by various factors, it is changed based on which: the level of inflation, the state of balance sheet of payments, the level of interest rate, the degree of use of foreign currency in Euro-market and in international calculations, degree of confidence in the currency, currency policy.