Part 1. True/false questions (5 points for each question, total: 20 points) Guideline. Indicate whether the following statements are true or false. Please carefully justify your answers. An answer with no justication will receive zero points. The pertinence and clarity of the justication will be taken into account in the grading. 1. In the Solow growth model, an increase in the saving rate decreases the growth rate of consumption in the short run. However, the effect on the growth rate of consumption in the long-run (i.e. in steady state) is uncertain. 2. In the Solow model, the growth rate of consumption and output per capita is a decreasing function of the capital stock per worker. 3. In the Solow model, under the assumption that households are strictly better off with more consumption than less, an increase in the saving rate is necessarily Pareto improving. 4. Let's consider the Ramsey growth model with a government. Assume that the government taxes rm's output, and transfer the revenues of this tax to households, through the form of a lump-sum payment. Under certain conditions, such a policy can increase the lifetime utility of households