After a 10% depreciation in the $ value of the £ sterling, a UK exporter keeps unchanged the $ price of the goods sold in the US market. If all other factors remain the same, what effect will this have on the revenue, measured in sterling, received by the manufacturer from its sales in the US?
- AIt will increase.
- BIt will decrease.
- CIt will be unchanged.
- DIt will depend on the elasticity of demand for the manufacturer’s good in the US.