Price elasticity of demand for royal crown cola

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Reference no: EM135641

Q1. Which of the following is true? The price elasticity of demand for Royal Crown Cola is equal to the price elasticity of demand for soft drinks in general It is invalid to make inter product elasticity comparison.

Q2. Suppose the nominal interest rate in North Pogo (in) is higher than the nominal interest rate in South Pogo (is) by 4%. What would the Fisher effect imply about the expected difference in inflation rates between North Pogo and South Pogo, where we denote the expected inflation rates in North and South Pogo as In and Is respectively. What would you expect to be the effect on the exchange rate between and ¥ and $?

Reference no: EM135641

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