Other things being equal, what will happen if a British company raises the sterling (£) price of goods it sells to Pakistan by the full extent of a depreciation of sterling against the Pakistan rupee?
1 )
The demand for the company’s goods will fall in Pakistan.
2 )
The company’s earnings in Pakistan will remain constant in pounds sterling.
The company’s earnings in Pakistan will remain constant in Pakistan rupees.
4 )
The profit margin on sales to Pakistan will decline.
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