When the nominal exchange rate changes from 10 pesos per dollar to 8 pesos per dollar, the dollar has:
A)appreciated.
B)depreciated.
C)become overvalued.
D)become undervalued.

Name: When the nominal exchange rate changes from 10 pesos per dollar to 8 pesos per dollar, the dollar has: A)appreciated. B)depreciated. C)become overvalued. D)become undervalued.
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Question

Quizplus · Accepted Answer

In this case, the dollar now buys fewer pesos than before. This means the dollar has depreciated.

When the Nominal Exchange Rate Changes from 10 Pesos Per