Write Down The Effects Of Devaluation.

1. Effect on exports: devaluation reduces the export price in term of foreign currencies. In the world of market, as a result, the exports are increased. So increase in the revenues of the country.

2. Effect on Foreign exchange: When there is greater devaluation, the speculators are sure that in future, the currency will not be devalued they will purchase the currency. In this way, there is flow of foreign exchange from foreign to home country.
3. Effect on resources: increase in exports will lead to the full utilization of human and natural resources of the country.

4. Effect on production level: when the exports are increased, all efforts are made to increase the production of the country.
5. Effect on industry: Increased demand for manufactured goods in the international
Market enhances more incentives for the expansion of the industries.

6. Effect on imports: Due to devaluation, the prices of imported goods in term of
Foreign currency goes up. So the prices of the commodities are increased because of increase in prices of imported machinery and raw material. The imports are reduced.
7. Correction of balance of payment: When the revenues are increased due to
Increase in exports and payments are reduced due to decrease in imports. As
A result, the balance of payment of the country is corrected.