Explanation/Reference:
Section: Addressing and Routing Protocols in an Existing Network Explanation Explanation:
The network in this scenario uses Network Address Translation (NAT) overloading. NAT overloading uses ports to translate inside local addresses to one or more inside global addresses. The NAT router uses port numbers to keep track of which packets belong to each host. NAT overloading is also called Port Address Translation (PAT).
NAT translates between public and private IP addresses to enable hosts on a privately addressed network to access the Internet. Public addresses are routable on the Internet, and private addresses are routable only on internal networks. Request for Comments (RFC) 1918 defines several IP address ranges that are reserved for private, internal use:
10.0.0.0 through 10.255.255.255

172.16.0.0 through 172.31.255.255

192.168.0.0 through 192.168.255.255

Because NAT performs address translation between private and public addresses, NAT effectively hides the address scheme used by the internal network, which can increase security. NAT also reduces the number of public IP addresses that a company needs to allow its devices to access Internet resources, thereby conserving IP version 4 (IPv4) address space.
An inside local address is typically an RFC 1918-compliant IP address that represents an internal host to the internal network. An inside global address is used to represent an internal host to an external network.
Static NAT translates a single inside local address to a single inside global address or a single outside local address to a single outside global address. You can configure a static inside local-to-inside global IP address translation by issuing the ip nat inside source static inside-local inside-global command. To configure a static outside local-to-outside global IP address translation, you should issue the ip nat outside source static outside-global outside-local command.
Dynamic NAT translates local addresses to global addresses that are allocated from a pool. To create a NAT pool, you should issue the ip nat pool nat-pool start-ip end-ip{netmask mask | prefix-length prefix} command. To enable translation of inside local addresses, you should issue the ip nat inside source list access-list pool nat-pool[overload] command.
When a NAT router receives an Internetbound packet from a local host, the NAT router performs the following tasks:
It checks the static NAT mappings to verify whether an inside global address mapping exists for the

localhost.
If no static mapping exists, it dynamically maps the inside local address to an unused inside

globaladdress, if one is available, from the NAT pool.
It changes the inside local address in the packet header to the inside global address and forwards

thepacket to its destination:

When all the inside global addresses in the NAT pool are mapped, no other inside local hosts will be able to communicate on the Internet. This is why NAT overloading is useful. When NAT overloading is configured, an inside local address, along with a port number, is mapped to an inside global address. The NAT router uses port numbers to keep track of which packets belong to each host:

You can issue the ip nat inside source list access-list interface outside-interface overload command to configure NAT overload with a single inside global address, or you can issue the ip nat inside source list access-list pool nat-pool overload command to configure NAT overload with a NAT pool.
You should use NAT overlapping when the addresses on an internal network conflict with the addresses on another network. The internal addresses must be translated to unique addresses on the external network, and addresses on the external network must be translated to unique addresses on the internal network; the translation can be performed through either static or dynamic NAT.
Reference:
CCDA 200-310 Official Cert Guide, Chapter 8, NAT, pp. 300-302
Cisco: Configuring Network Address Translation: Getting Started: Example: Allowing Internal Users to Access the Internet