When the monetary base increases by $2 billion, the quantity of money increases by $10 billion. Thus, the money multiplier equals

If a firm is producing an output rate at which marginal cost is equal price, the firm

A) is maximizing profits. B) should increase its output level. C) should reduce its output level. D) will not be covering its fixed cost.

to the diagram, in which Q f is the full-employment output. If the economy's current aggregate demand curve is AD 3 , it is experiencing:

A.  a positive GDP gap.
B.  a negative GDP gap.
C.  a recession.
D.  cost-push inflation.