An ArcGIS user needs to view map coordinates in nautical miles but is using a projected coordinate system that displays meters. How can the user change the display units?

The correct answer involves changing the display units of the data frame containing the layer. In ArcGIS, the data frame serves as a context for displaying layers, and it governs how geographical and map coordinate systems are presented. By adjusting the units at the data frame level, the user can specifically change how distances are represented, allowing for the display of nautical miles rather than meters.

This process includes accessing the properties of the data frame and navigating to the "General" or "Units" tab where one can specify the desired measurement units. Changing the display units in this way ensures that all measurements and labels associated with the data frame conform to the user's requirement for nautical miles.

Adjustments made to other aspects, such as the Environment Settings or the Measure tool, would not directly alter how the map displays its coordinates. Adjusting output coordinates generally affects analysis or exported data, while modifying the Measure tool settings only affects temporary measurements rather than the overall display of map coordinates.