Define Devaluation and Use a Figure to Show the Effect

question 71

Essay

Define devaluation and use a figure to show the effect of a currency devaluation on the economy.

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Definitions:

Extreme Poverty

A condition characterized by severe deprivation of basic human needs, often measured by the World Bank as living on less than $1.90 a day.

Economic Growth

The rise in the real market value of goods and services generated by an economy over a period.

Exchange Rates

The value of one currency for the purpose of conversion to another, reflecting the global market’s valuation of one currency compared to another.

Direct Foreign Investment

The act of investing by companies or individuals from one country into business operations or assets within a different country, encompassing the establishment of business ventures or the acquisition of assets.