In late 2000,you could purchase about 400 drachma for a dollar.In late 2005 you could purchase about 280 drachma for a dollar.These exchange rates are given in
A)real terms and over this period the dollar appreciated.
B)real terms and over this period the dollar depreciated.
C)nominal terms and over this period the dollar appreciated.
D)nominal terms and over this period the dollar depreciated.

Question

Quizplus · Accepted Answer

The given exchange rates are in nominal terms, as they directly state the amount of drachma that can be purchased for a dollar. Over this period, the dollar depreciated as the exchange rate decreased from 400 drachma to 280 drachma per dollar, meaning that it took more dollars to purchase the same amount of drachma.

In Late 2000,you Could Purchase About 400 Drachma for a Dollar.In