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Question

In case of currency devaluation, what benefit does a foreign company receive?

A
Tax incentives
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B
Cheaper investment
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C
Relaxation in mandatory norms
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D
Elimination of competition
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Solution

The correct option is B Cheaper investment
Currency devaluation is the deliberate downward adjustment of a country's currency value. In such a case, the domestic currency losses its value. Thus, a foreign investor can buy more devalued currencies by paying dollar compared to earlier instances. This makes investment cheaper for foreign companies.

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