Forex encyclopedia

Any product can be estimated within market framework of a certain state. Therefore, customs duty for import is laid in price of imported product that covers the difference between national and import product of the same category. When needed, import prices can be brought down to zero in order to boost import. It is made when imported goods are not produced in the country, when favorable conditions for less developed country are set or if trade relations with a certain country are important. This tariff is included in cost of product, therefore, Import Price index is taken into account upon calculation of consumer prices.

Various kinds of money and money means, which are distinguished by different extent of liquidity, that is to say, speed and ease of conversion into cash, constitute the notion of money aggregates in the economy. Total of all money aggregates is the indication of money supply structure of a country. Important economic figure is monetization factor, which represent the ration of M2 to GDP. This figure is also known as financial depth, and it identifies sufficient amount of money means in circulation in state. For a developed country its best possible level is not less than 55%, whereas lower level tells about shortage of money that prevent economic development of the country.