Difference between revisions of "Devaluation"
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| − | Devaluation is a government policy to dilute the value of its currency, typically by printing more of it. The reasons for this can include helping voters (like farmers) who are in debt by reducing the real value of their obligations, or helping the government itself pay back loans. | + | Devaluation is a [[government]] policy to dilute the value of its [[currency]], typically by printing more of it. The reasons for this can include helping voters (like farmers) who are in debt by reducing the real value of their obligations, or helping the government itself pay back loans. |
| − | Sometimes devaluation is done to increase exports and decrease imports, thereby reducing a balance-of-payments trade deficit. | + | Sometimes devaluation is done to increase exports and decrease imports, thereby reducing a balance-of-payments trade [[deficit]]. |
[[Category:Economics]] | [[Category:Economics]] | ||
Revision as of 20:35, August 27, 2007
Devaluation is a government policy to dilute the value of its currency, typically by printing more of it. The reasons for this can include helping voters (like farmers) who are in debt by reducing the real value of their obligations, or helping the government itself pay back loans.
Sometimes devaluation is done to increase exports and decrease imports, thereby reducing a balance-of-payments trade deficit.