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One can exchange the currencies of Aldaria and Borduria at the rate 10 aldas/1 bordo. The price level in Aldaria is 50, while

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Answer #1

A. The alda has appreciated in nominal terms.

Reason :- initially, when the exchange rate was 10 aldas / 1 bordo, we needed 10 aldas to buy 1 bordo. Later, the exchange rate decreased. Now we needed 8 aldas to buy 1 bordo. This shows an appreciation in aldas and depreciation in bordo.

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