On the range graph there is a figure on the right hand side of the setting lines which is the true airspeed in knots (in the case of the full throttle/2300rpm line this is 160kts). To apply the headwind correction, deduct 40 from 160 to give the groundspeed of 120kt, then multiply the 844nm by the GS/TAS formula (i.e. by 120/160), which gives 633nm.

but the question is a little unfair....it just asks for the range...so do they mean NAM or ground nm?

2 reasons for going for ground range

Firstly, they give you a wind component in the question data, so use it....secondly, the answers offer 'nm' ranges...if they had wanted nautical air mile range, I'm pretty confident they would have stated NAM in the answers.