Suppose a country is experiencing significant productivity growth of 5% relative to that of another country with 2% productivity growth. Both countries have about 40% of their consumption in nontraded goods. What does this imply about the rate at which the exchange rate will change?

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The Answer of Suppose a country is experiencing significant productivity growth of 5% relative to that of another country with 2% productivity growth. Both countries have about 40% of their consumption in nontraded goods. What does this imply about the rate at which the exchange rate will change?

Suppose a Country Is Experiencing Significant Productivity Growth of 5