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The terms dynamic equivalence and formal equivalence, coined by Eugene Nida, are associated with two dissimilar translation approaches that are employed to achieve different levels of literalness between the source and target text, as evidenced in biblical translation.
The two have been understood basically, with dynamic equivalence as sense-for-sense translation (translating the meanings of phrases or whole sentences) with readability in mind, and with formal equivalence as word-for-word translation (translating the meanings of words and phrases in a more literal way), keeping literal fidelity.