For each of the statements below write true or false and then provide a short (1 sentence) explanation for your answer.

a. If the Ricardian equivalence holds then a tax cut increases national savings and decreases the interest rate.

b. A positive net export necessarily implies positive current account balance.

c. The income effect of an increase in the interest rate increases the consumption for a borrower.

d. Unemployment is a leading macroeconomic variable.

e. The substitution effect of an increase in interest rate has opposite signs for borrowers and lenders.