Macroeconomics

Devaluation

Definition

What is Devaluation?

An official reduction in the value of a currency under a managed or fixed exchange-rate system.

Example in practice

A government changes the official rate from 500 to 700 units per dollar.

Keep learning

The total market value of final goods and services produced within a country during a period.

Gross domestic product adjusted for changes in prices.

Gross domestic product measured at current prices without adjusting for inflation.

A market environment in which investors favour higher-risk assets.

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