If the reserve ratio is 5 percent, then $500 of additional reserves can create up to

Which of the following is evidence that consumption depends on total wealth, and not just on current income?

A) People save very little for their retirement. B) The pre-announced phased-in tax cuts of 1981-83 caused little change in consumption in 1981. C) A drop in consumer confidence, with unchanged current income, often causes total consumption spending to fall. D) all of the above E) none of the above

If both demand and supply increase, price will

a. always increase b. always decrease c. increase only if supply increases more than demand does d. increase only if demand increases more than supply does e. decrease only if supply increases less than demand does