Urgent help!

[Deleted User]

Nothin

[siddhartharora]

I could be wrong, but if productivity does increase in Australia, that means more money will be handed out as wages/salaries to those who have gained a job. So pretty much more productivity is the creation of jobs, and if more jobs are being created, then there is more money going to be put into it as well, hence the purchasing power of money will decrease (depreciated) because there are more people now with money.

Correct me if I went wrong somewhere 

[Saur11]

Increase in productivity means there is an increase in efficiency - supply increases. With an increase in supply, domestic output increases. lessens pressure on cost inflation. Lower prices globally make Australia an attractive trade partner globally. Greater demand for Australian good as they are cheaper - puts pressure on AUD - AUD appreciates.

[tram]

If there is an increase in productivity in Australia, will the Australian Dollar appreciate or depreciate and why?

I would also go with the AUD appreciating, increase in productivity means our companies doing well, leading to overseas investors wanting to invest in australian companies, leading to an increased demand for AUD, putting upwards pressure on the price of AUD; hence appreciating.

[Age991]

Also the higher supply ensures AD doesn't overflow consumption spending on imports (which would depreciate the dollar). This all ensures our dollar is appreciating

[pi]

Please don't bump old threads. And Deleted User, deleting your question is poor form mate (and looks stupid when it's been quoted in a reply too).

Regards.