1. Studies of family income over time reveal that:

most people in the lowest quintile tend to stay there over their lifetimes.

many people who move down the income ladder tend to be young.

many people who start out at the bottom of the income ladder when they are young move up the income ladder as they age.

2. When the FR Bank buys $1 worth of securities in the open market, in the simple multiplier model total deposits ___ by ___ than $1. Answer:

increase; less

increase; more

decrease; less

decrease; more