Out of the State Budget Social and Economic of Funds Essence and Importance

Abstract

State debt between different groups of investors settles and regulates money circulation; of individuals by attracting funds and their ability to pay demand reduces Production costs at the expense of state credit, cash in circulation if investments are financed an absolute decrease in mass occurs. Also, the state salaries of teachers and medical workers at the expense of the loan if it is financed, it is a component of the population's ability to pay demand while the structure changes, the mass of cash in circulation does not change will remain. Sale and purchase of state securities or they’re by the Central Bank on granting loans based on collateral transactions carried out by commercial banks of the country is one of the important means of liquidity regulation is considered. Appearing as a borrower in the financial market, the state increases the demand for debt funds and this has an effect on the increase in credit prices. The higher the demand of the state, other conditions being equal if there is, the loan interest rate will be higher and credit for entrepreneurs becomes more expensive. Debt entrepreneurs in the field of production forces to reduce their investments and at the same time, it in the form of buying government securities encourages savings.