Can I set state inside a useEffect hook

Lets say I have some state that is dependent on some other state (eg when A changes I want B to change).

Is it appropriate to create a hook that observes A and sets B inside the useEffect hook?

Will the effects cascade such that, when I click the button, the first effect will fire, causing b to change, causing the second effect to fire, before the next render? Are there any performance downsides to structuring code like this?

let MyComponent = props => {
  let [a, setA] = useState(1)
  let [b, setB] = useState(2)
  useEffect(
    () => {
      if (/*some stuff is true*/) {
        setB(3)
      }
    },
    [a],
  )
  useEffect(
    () => {
      // do some stuff
    },
    [b],
  )

  return (
    <button
      onClick={() => {
        setA(5)
      }}
    >
      click me
    </button>
  )
}

Effects are always executed after the render phase is completed even if you setState inside the one effect, another effect will read the updated state and take action on it only after the render phase.

Having said that its probably better to take both actions in the same effect unless there is a possibility that b can change due to reasons other than changing a in which case too you would want to execute the same logic