4) Answer True or False, and then explain briefly. The key part of the answer is the

explanation. You may include diagrams and make any reasonable assumptions you feel are

necessary.

a) Suppose the rate of savings increases. This has a very different effect on the long run

growth rate of output per capita depending on whether an economy is described by the

Harrod-Domar model or by the Solow model. This reflects a difference in the

assumptions regarding inputs and production.