Assume that in the late years, Canadian nominal GDP grew by 5% and prices increased by 3% while the U.S experienced nominal GDP growth of 4% and prices in that country were unchanged year over year.

A. Which country had the highest productivity growth( With calculation)?

B. Holding all other factors constant, what can anticipate will be the likely center bank action in each of the two countries and why?

C. What will be the likely impact on the U.S Canada exchange rate of these Central bank actions?