The devaluation of currency improves the balance of payments by making domestic products more attractive to foreign consumers through lower relative prices. When the currency is overvalued domestically produced goods are more expensive in the world market (reducing exports) and foreign produced goods are cheaper (increasing imports).
The devaluation of currency improves the balance of payments by making domestic products more attractive to foreign consumers through lower relative prices. When the currency is overvalued domestically produced goods are more expensive in the world market (reducing exports) and foreign produced goods are cheaper (increasing imports). The devaluation of the currency will decrease imports because it will take more of the local currency to purchase foreign produced goods.
The devaluation of currency improves the balance of payments by making domestic products more attractive to foreign consumers through lower relative prices. When the currency is overvalued domestically produced goods are more expensive in the world market (reducing exports) and foreign produced goods are cheaper (increasing imports). This imbalance in trade causes a decrease in the reserves of the company, which is the opposite of what this choice states.
The devaluation of currency increases exports because the domestically produced goods are now cheaper when compared to foreign produced goods. This will encourage exports.
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