According to the consumption function, as income increases, consumption

increases by the same amount.

decreases by a smaller amount.

decreases by a greater amount.

increases by a greater amount.

increases by a smaller amount

Productivity, defined as real GDP per hour worked, increases if

All of these

new technologies are continuously discovered.

saving and investment cause an increase in the quantity of capital per worker.

the average educational level of the work force increases.

new knowledge is applied in production.

Suppose banks desire to keep 5 percent of all deposits on reserve, and the Fed purchases $10 million ofgovernment securities from a private securities dealer. Then,

there cannot be any change in bank deposits.

the maximum amount that deposits in the economy can decrease will be $10 million.

the maximum amount that deposits can decrease will be $200 million.

the maximum amount that deposits in the economy can increase will be $10 million.

the maximum amount that deposits can increase will be $200 million.

Suppose the required reserve ratio is 10 percent, and banks hold no excess reserves. If the Fed purchases$10 million worth of government bonds from Bank INF, the amount of deposits held by the entire banking system will ultimately

increase by $100 million.

decrease by $10 million.

decrease by $100 million.

not change.

increase by $10 million