Devaluation lowers export prices in foreign currency due to inelastic demand

Steps:

• Devaluation reduces the value of the Singapore dollar against foreign currencies.
• This makes Singapore's exports cheaper for foreign buyers in their own currency terms.
• With inelastic demand (elasticity <1), quantity demanded increases little despite the price drop.
• Thus, export prices fall, but total export value may not rise sufficiently.

Why D is correct:

• Devaluation directly lowers the foreign-currency price of exports, as defined by exchange rate depreciation making domestic goods cheaper abroad.

Why the others are wrong:

• A: No information on government budget or fiscal policy impacts.
• B: Devaluation raises import prices in domestic currency terms.
• C: Export value likely falls due to inelastic demand limiting quantity gains to offset price drop.

Final answer: D