1. The consumer's response to changes in the current and future income is motivated by consumption

smoothing. T/F

2. Pay-as-you-go social security improves welfare for everyone in all generations if the population

growth rate exceeds the real rate of interest. T/F

3. In the real intertemporal model, the representative firm increases investment if the real interest

rate falls. T/F

4. In the real intertemporal model, if government spending increases, then in equilibrium output

increases one-for-one with the increase in government spending. T/F

5. In the real intertemporal model, if economic agents receive bad news about future total factor

productivity, then employment rises in the current period. T/F