Please indicate whether the statement in each part is true, false, or uncertain given the information provided. You must briefly justify your answer, i.e. you will not receive full credit for simply stating the answer without an explanation.

(a) (8 points) In the Solow model, changes in the savings rate affect the long-run growth rate of living standards.

(b) (7 points) Precautionary savings tend to increase the level of consumption today.