If the rate of productivity growth in the United States exceeds the rate of productivity growth in Great Britain we would expect the U.S.dollar to depreciate in value against the British pound.

Question

Quizplus · Accepted Answer

If the rate of productivity growth in the United States exceeds the rate of productivity growth in Great Britain, it would increase the value of the US dollar relative to the British pound, not depreciate it. This is because increased productivity leads to increased economic growth and a higher demand for the currency, which in turn leads to an appreciation in its value.

If the Rate of Productivity Growth in the United States