Which term refers to an exaggeration or overstatement in literature?

The term "hyperbole" specifically refers to an exaggeration or overstatement used for emphasis or effect in literature. This literary device is often employed to create a dramatic impact or to draw attention to a specific idea or emotion. For example, saying "I'm so hungry I could eat a horse" is a hyperbolic expression that vividly illustrates extreme hunger without taking it literally.

The other terms have distinct meanings. A metaphor is a figure of speech that makes a comparison between two unrelated things by stating that one is the other, which does not involve exaggeration. An understatement involves downplaying a situation or characteristic, often for irony or rhetorical effect. Simile, on the other hand, is a comparison between two different things using "like" or "as," and does not convey exaggeration either. Thus, hyperbole is the correct answer for describing an intentional exaggeration in literature.