Currency Devaluation

Debasement
Debasement is the act of deliberately rendering a currency less valuable, not through devaluation but by reducing the precious metal content of the coinage.
Inflation
A general increase in prices in an economy, leading to a consequent fall in the purchasing value of money.
Inflationary Spiral
An inflationary spiral is an episode of inflation in which price increases occur at an increasing rate, and currency rapidly loses value.
Money Illusion
The misconception that an increase in nominal income or wealth translates directly to an increase in real purchasing power, despite similar rises in price levels.
Revalorization of Currency
Revalorization of currency involves replacing one currency unit with another to counteract the effects of frequent or significant currency devaluation, often associated with high inflation rates.
Weak Dollar
A weak dollar refers to a situation where the value of the U.S. dollar has fallen relative to other foreign currencies. This results in the dollar’s decreased purchasing power in comparison to other currencies such as the pound, yen, euro, or francs.

Accounting Terms Lexicon

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