Debasement

Currency debasement refers to the reduction in the value of a currency.

This can be achieved through various means, such as increasing the money supply, lowering interest rates, or implementing policies that encourage inflation. When the supply of money increases, the purchasing power of each unit of currency decreases, leading to inflation.

Debasement was traditionally associated with mixing inferior metals into currencies made up of precious metals, such as gold and silver, thus lowering (debasing) their value. Today, debasement occurs when a government prints money (increases the money supply) without a corresponding increase in output.

www.investopedia.com

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