[Elecraft] What does the frequency readout mean?

[Pete Smith N4ZR]

I'm having a hard time getting my head around this. My radio is on 
3507.02 USB-CW, with a 500 Hz Pitch setting. I change the Pitch setting 
to 300 Hz, and the display still reads 3507.02.  What is this 
frequency?  The suppressed-carrier frequency plus the CW pitch?  Does 
that mean that when I change the pitch, the radio is actually moving its 
frequency a little bit?

A somewhat related question.  Same setup, but listening to a signal on 
the air.  "Beat note" is ~500 Hz.  I turn the RIT so that the received 
signal is lower frequency - say 200 Hz.  I transmit.  What does the 
station on the other end hear, assuming he is also using USB-CW?  Does 
my "beat note" go up in his receiver, or down?

Sorry to be dim.

-- 

73, Pete N4ZR
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