c) devaluation and depreciation of a currency

• ​devaluation of currency?

  decrease in the value of one currency against another under a fixed system.
• how can the devaluation of a currency be achieved?

  by selling the currency
• what's competitive devaluation?

  when govt deliberately devalue their own currencies to improve international competitiveness
• what system does competitive devaluation occur in?

  occurs in a hybrid or fixed exchange rate
• what's a depreciation?

  fall in the value of the currency under floating exchange rates.
• why does depreciation occur ?

  naturally due to market forces although govt action e.g lowering I.R might affect it indirectly
• where does competitive depreciation occur?

  occur in a floating or hybrid exchange rate
• how does govt intervention affect competitive depreciation?

  govt intervention might directly reduce the value of currency, improving the country's international competitiveness