When the nominal exchange rate falls
A)the domestic currency buys more units of foreign currency and the domestic currency has depreciated.
B)the domestic currency buys fewer units of foreign currency and the domestic currency has depreciated.
C)the domestic currency buys more units of foreign currency and the domestic currency has appreciated.
D)the domestic currency buys fewer units of foreign currency and the domestic currency has appreciated.

Question

Quizplus · Accepted Answer

When the nominal exchange rate falls, it means that the domestic currency buys fewer units of foreign currency. This indicates a depreciation of the domestic currency.

When the Nominal Exchange Rate Falls