Budget deficit, exchange rates and inflation

Abstract

If we want to look at the history of the finance of a state we should certainly bear in mind where it began to exist 
until current existing situation. 
In our country there is been frequent and fast changes. We went from a centrally planned economy to a 
democratic society with market economy basis, rushing for a great development, opportunities and cooperation 
with other countries which had entered earlier in the development path. All these changes and will have a 
positive or negative impact on the economy. 
Issues which will be presented as concern would have a certain negative impact that will not only cause 
problems for the time being but for the coming years as well. 
One may come up with a greater number of concerns but in our study objective, for our economy, we will be 
looking at the fact of economic development, in particular at the exchange rate and inflation rate of the country. 
Standing at the impact of exchange rates we take into account the effects of trade on the economy. Where 
mentioned, exchange rates affect not only trade, but will be a problem in the case of the debt existence. In a 
developing country a certain level of debt is normal. This is the result of policies encouraging development, as 
well as a lack of liquidity could this from the negative difference of income and expenditure budget. 
Hereby, we will present the effects of inflation stressing here the changes in cash flow, its value as well as that 
part of imported inflation. 
All these elements listed above will be addressed along topic budget deficit, exchange rates and inflation.