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    of cash circulation by immobilizing significant amounts of money; policy C will result in increase the selling of goods and services (we have to produce more services or give money to those people who can’t afford more goods and services; but this can result in increase of the inflation rate and further worsening of the situation).

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    The stability of currency and exchange rates correlation together with commercial balance and market structures play the leading role in the development of a particular country’s economy. The proportion between exchange rates becomes more important when the country has multiple economical links with other countries, and therefore this issue is of big importance to the US economy and government policy. The aim of this essay is to analyze existing data and the changes in the position of the nation’s currency, apply necessary economic reasoning and to invent possible solutions of the existing problems.

    The flow of currency influences the whole economical situation and therefore this is a subject to be regulated by the government. It is common knowledge that being deprived of regulation, cash flow of a state contributes to the world economy, but may not be contributing to the welfare of the na-tion and state itself. The basic equalities between economical values important for monetary policy are the following:
    • Flow of currency equals to the flow of goods and ser-vices
    • Flow of currency equals to monetary mass multiplied to the velocity of circulation of money
    • Flow of goods and services equals to the product of prices index and the amount of sold production.

    Taking into consideration these equalities, there can be distinguished three main systems of fiscal policy of the gov-ernment: the monetary policy (when the monetary mass is being decreased in some way) [let us call this policy A], the policy of decreasing the velocity of money (it is usually done with immobilizing large sums of money)[let us call this policy B], and the policy of regulating the flow of goods and services [let us call this policy C] [4, p. 4]. Let us analyze the main economical situations, which may occur and the fiscal policy instruments that can be used to improve the situation.

    1. The flow of currency is increasing, the flow of goods and services remains the same: in this case we have inflation and according to policy A, we have to use the demolition of currency or raise the rates; policy B offers us to decrease the velocity of cash circulation by immobilizing significant amounts of money; policy C will result in increase the selling of goods and services (we have to produce more services or give money to those people who can’t afford more goods and services; but this can result in increase of the inflation rate and further worsening of the situation).

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    The flow of currency influences the whole economical situation and therefore this is a subject to be regulated by the government. It is common knowledge that being deprived of regulation, cash flow of a state contributes to the world economy, but may not be contributing to the welfare of the na-tion and state itself. The basic equalities between economical values important for monetary policy are the following:
    • Flow of currency equals to the flow of goods and ser-vices
    • Flow of currency equals to monetary mass multiplied to the velocity of circulation of money
    • Flow of goods and services equals to the product of prices index and the amount of sold production.

    Taking into consideration these equalities, there can be distinguished three main systems of fiscal policy of the gov-ernment: the monetary policy (when the monetary mass is being decreased in some way) [let us call this policy A], the policy of decreasing the velocity of money (it is usually done with immobilizing large sums of money)[let us call this policy B], and the policy of regulating the flow of goods and services [let us call this policy C] [4, p. 4]. Let us analyze the main economical situations, which may occur and the fiscal policy instruments that can be used to improve the situation.

    1. The flow of currency is increasing, the flow of goods and services remains the same: in this case we have inflation and according to policy A, we have to use the demolition of currency or raise the rates; policy B offers us to decrease the velocity of cash circulation by immobilizing significant amounts of money; policy C will result in increase the selling of goods and services (we have to produce more services or give money to those people who can’t afford more goods and services; but this can result in increase of the inflation rate and further worsening of the situation).

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    • Flow of currency equals to monetary mass multiplied to the velocity of circulation of money
    • Flow of goods and services equals to the product of prices index and the amount of sold production.

    Taking into consideration these equalities, there can be distinguished three main systems of fiscal policy of the gov-ernment: the monetary policy (when the monetary mass is being decreased in some way) [let us call this policy A], the policy of decreasing the velocity of money (it is usually done with immobilizing large sums of money)[let us call this policy B], and the policy of regulating the flow of goods and services [let us call this policy C] [4, p. 4]. Let us analyze the main economical situations, which may occur and the fiscal policy instruments that can be used to improve the situation.

    1. The flow of currency is increasing, the flow of goods and services remains the same: in this case we have inflation and according to policy A, we have to use the demolition of currency or raise the rates; policy B offers us to decrease the velocity of cash circulation by immobilizing significant amounts of money; policy C will result in increase the selling of goods and services (we have to produce more services or give money to those people who can’t afford more goods and services; but this can result in increase of the inflation rate and further worsening of the situation).

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    1. The flow of currency is increasing, the flow of goods and services remains the same: in this case we have inflation and according to policy A, we have to use the demolition of currency or raise the rates; policy B offers us to decrease the velocity of cash circulation by immobilizing significant amounts of money; policy C will result in increase the selling of goods and services (we have to produce more services or give money to those people who can’t afford more goods and services; but this can result in increase of the inflation rate and further worsening of the situation).

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    2. The flow of currency is decreasing, the flow of goods and services remains the same: in this case we have deflation (the decrease of prices on goods and services). In this case policy A suggests to increase monetary mass (ways of doing this: create extra cash flow, increase state debt, emit cash). Policy B offers us to augment the velocity of cash circulation (to make people spend more money, stop immobilizing etc.); policy C offers to reduce the amount of goods and services sold.

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