Nominal Exchange Rates From the point of view of United states Looking at Germany Nominal exchange rate E Price of dm in terms of dollars Appreciation of the dollar Price of dollars in dm increases equivalently: price of DM in dollars decreases equivalently EXchange rate decreases: Ey Depreciation of the dollar Price of dollars in DM decreases equivalently price of DM in dollars increases equivalently -EXchange fate inereases: EiNominal Exchange Rates From the Point of View of United States Looking at Germany Nominal exchange rate E Price of DM in terms of dollars Appreciation of the dollar Price of dollars in DM increases equivalently: price of DM in dollars decreases equivalently: Exchange rate decreases:E↓ Depreciation of the dollar Price of dollars in DM decreases equivalently: price of DM in dollars increases equivalently: Exchange rate increases:E↑