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Encoder Question

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bartmc

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Its my understanding that the encoder is reporting my altitude as if it were attached to an altimeter that was set to 29.92 then ATC corrects this for the correct altimiter setting? Is that correct? I'm wondering why I have the correct altimeter setting in my altimeter yet ATC was reporting me as much as 200' off of what my altimeter was reading. Is this normal? For instance I was at 8,500' indicated and ATC was reporting me to traffic as "Cherokee 12 O'clock 8,300"
 

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