If the price of a unit of output for a perfectly competitive firm is $5 and the profit-maximizing condition is met, then MPL/PL = MPK/PK = MPA/PA will be equal to

Which of the following statements is true?

A) Defending an overvalued currency is easier than defending an undervalued currency. B) Defending an undervalued currency is easier in the short run than in the long run. C) The nominal exchange rate is the ratio of the same basket of goods in two countries. D) The real exchange rate is calculated by dividing the nominal exchange rate by the inflation rate.

Suppose that for every $1 increase in autonomous investment, real GDP demanded rises by $5. Which of the following must be true?

a. The line of aggregate expenditure exactly matches the line of equilibrium. b. Noninvestment expenditures increase with every increase in investment spending. c. The point of equilibrium will decrease with every increase. d. The slope of the aggregate expenditure curve is 5.