Essay On Domestic Economy

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GROSS DOMESTIC PRODUCT
“The gross domestic product of a country is a measure of all of the finished goods and services that a country generated during a given period. GDP gives best measure of health of country’s economy. It is the number calculated by consolidation of total expenses of government, money spent by business, private consumption and exports of the country. Increment in GDP indicates economic growth. Foreign investors get attracted towards the countries with economically strong countries with good GDP. It leads to better valuation of the currency of the country because more and more money comes to the country.
POLITICAL STABILITY AND ECONOMIC PERFORMANCE
Countries with stable government can give better growth in economy through
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Generally countries release their data of employment after certain interval. As the rate of employment is higher people in the country gets enough chance for work of their choice and expertise. In most cases the value of currency increases as the number of unemployed people decreases. But sometimes high employment increases purchase power parity of the people and can lead to higher inflation in the country, so it can adversely affect valuation of the currency.
RELATIVE STRENGTH OF OTHER CURRENCIES
Currency valuations are also equally affected by global parameters. Country’s economic strength is compared with other countries strength and if other countries are strong money moves to those countries. It ultimately reduces valuation of the country with comparatively poor health of the economy.
MACROECONOMIC AND GEOPOLITICAL EVENTS
In the case of events like elections, wars, monetary policy changes, financial crisis, currency of the country is highly affected. Such macroeconomic and geopolitical events also affect other parameters. These events have the ability to change or reshape of the country including fundamentals of the country. For example, wars can put a huge economic strain on a country and greatly increase the volatility in a region, which could impact the value of its currency. It is important to keep up to date on these macroeconomic and geopolitical

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