Devaluation of currency will be more beneficial if prices of exports become cheaper to importers.


Devaluation of a currency refers to a deliberate decrease in the value of a country's currency relative to other currencies. This is typically done by a country's central bank or government in order to stimulate its economy, boost exports, and reduce imports.


Devaluation can have several benefits for an economy, including:

1. Increased competitiveness of exports: When a country's currency is devalued, its exports become cheaper for foreign importers. This makes the country's goods and services more affordable and competitive in international markets, leading to an increase in export demand.

2. Boost to domestic industries: Devaluation makes imports more expensive, which can encourage consumers to buy domestically produced goods instead. This helps protect and support domestic industries, leading to increased employment and economic growth.

3. Improved trade balance: Devaluation can help reduce a country's trade deficit by making imports more expensive and exports more competitive. This leads to a decrease in the overall value of imports and an increase in the value of exports, resulting in a more favorable trade balance.

4. Increase in foreign investment: Devaluation can make a country's assets and investments more attractive to foreign investors. This is because the lower value of the currency means that foreign investors can acquire more assets or investments for the same amount of their own currency.


Out of the given options, the most beneficial situation for devaluation is when prices of exports become cheaper to importers. This is because:

- Cheaper exports attract more foreign buyers, leading to an increase in export demand and revenue for the country.
- Increased export revenue helps to strengthen the country's balance of payments, as well as its overall economic growth.
- Cheaper exports also make the country's products more competitive in international markets, which can help to stimulate domestic industries and create employment opportunities.
- Cheaper imports, on the other hand, can have negative consequences for the domestic economy. It can lead to a decrease in domestic production, as consumers opt for cheaper imported goods, and can also lead to job losses in industries that cannot compete with cheaper imports.
- Therefore, while devaluation can have various benefits, it is most advantageous when it leads to cheaper exports and increased competitiveness in international markets.