Exaggeration refers to the heightening of action and scenery that takes place in animation. For example, if a character is bending backwards, in animation it may appear that the character comes very close to touching the ground. Another character who takes a big step actually takes a gigantic step in an animated sequence. The key to making this animated effect work is balance. If one thing in a shot is exaggerated, but nothing else is the result looks unnatural. The same is true of the obverse; if too many things in a scene are exaggerated, the result also looks unnatural.
This 2D effect tells the viewer what will happen next in part by a sequence of events that "shows" the direction in which the action will go. For example, in old cartoons a character often raised his foot and cocked his body before setting off on a run. The act of raising his foot and changing his body position allowed the audience to anticipate the character's intention before it was executed.
This effect literally sets the stage for the action. In order for the viewing audience to understand what to focus on, the animator must set the stage. If a scene features two characters - a father and a son, for example - the animator may draw the father alone on an empty set which lets the audience know where the focus lies by virtue of the fact that the father is alone. If the father is then joined by the son, the animator may make the son look at the father, which again puts the focus back on the father.
This is the effect that makes a ball look like it has been flattened as it hits the ground in an animated scene. Although this effect is not realistic, it gives the object the appearance of movement. This stands as one of the key effects in character animation, because without the squash and stretch effect being employed on a character's moving face, it appears unnatural and lifeless.