Currency devaluation is a deliberate downward adjustment of a country's currency value relative to another currency, group of currencies, or standard. When a country's currency is devalued, it becomes less valuable. As a result, it takes less foreign currency to purchase the devalued domestic currency. This makes the devaluing country's goods and services (its exports) cheaper for foreign buyers. This increased price competitiveness is intended to boost the volume of exports, which can help improve the country's trade balance and stimulate economic activity.

A. Devaluation makes imported goods more expensive for domestic consumers, which typically leads to an increase in inflation, not a decrease.

B. By making exports cheaper and more attractive, devaluation aims to increase net exports (exports minus imports), which is a component of GDP, thereby increasing GDP.

C. Devaluation makes foreign goods more expensive in the domestic market, which typically leads to a decrease in the quantity of imports, not an increase.

1. Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2018). International Economics: Theory and Policy (11th ed.). Pearson. In Chapter 17, "Output and the Exchange Rate in the Short Run," the text explains that a depreciation (devaluation) of the domestic currency makes domestic goods and services cheaper for foreigners, which increases exports. It also makes foreign goods more expensive for domestic residents, which reduces imports.

2. MIT OpenCourseWare. (2014). 14.02 Principles of Macroeconomics, Lecture Notes - The Open Economy: The IS-LM Model in the Open Economy. Massachusetts Institute of Technology. Section 19.3, "The Effects of Policy in an Open Economy," details how a real depreciation (devaluation) leads to an increase in net exports, which in turn increases domestic output (GDP).

3. Dornbusch, R., Fischer, S., & Startz, R. (2018). Macroeconomics (13th ed.). McGraw-Hill Education. Chapter 6, "International Linkages," clarifies that a currency depreciation raises the price of imported goods, which can contribute to domestic inflation. It also states that depreciation stimulates net exports, increasing aggregate demand and output.