Countries Occasionally Intentionally Devalue Their Currencies

question 63

Essay

Countries occasionally intentionally devalue their currencies. So what is the logic and likely results of intentionally devaluing their domestic currency? International economic analysis characterizes the trade balance adjustment process as occurring in three stages. List and explain the three stages too.

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Definitions:

Equilibrium Strategies

The optimal plans of action for players in a game, where each player's strategy is the best response to the strategies of others.

Rebates

A partial refund to someone who has paid too much for tax, rent, or a utility, or a marketing strategy offering a discount on an initial purchase back after the fact.

Firms

Business organizations or entities that produce goods or provide services, ranging in size from single proprietorships to large corporations.

Cooperative Games

Cooperative games are strategic games where players can form binding agreements to cooperate and share the payoffs.