1. 'Il'nefFalserncertain: Please say if the statement is true, false, or uncertain and briey explain your answer {4 sentences maximum}. You are free to use math to make your point, but you can earn full credit with economic intuition only. (a) {5 points} Because human capital is positively correlated with savings and with output per capita, Mankiw, Homer and Wail expect that the coefcient on log {3] in their regression should be biased downward if human capital is not controlled for. The dependent variable is the log of output per capita and s is the savings rate. [h] {5 points} In the two-period consumption model the income and substitution e'ects re- sulting from an increase in the interest rate aect period 1 consumption in opposite ways