Economics (AS & A Level) · Oct / Nov 2022 · Paper 12 · Question 26

Following a 10% depreciation in the $ value of the £ sterling, a UK exporter leaves the $ price of the goods it sells in the US market unchanged. Other things being equal, what will be the effect on the revenue measured in sterling obtained by the manufacturer from its sales in the US?

1. AIt will increase.
2. BIt will decrease.
3. CIt will be unchanged.
4. DIt will depend on the elasticity of demand for the manufacturer’s good in the US.

As printed in the paper