TRUE or FALSE? (25 pts)

(a) In Solow-Swan model, there is no long-run growth without tech- nology progress.

(b) Classical dichotomy works in the long-run because the prices in the long-run are flexible.

(c) Philips curve is about the trade-off between the unemployment rate and the inflation rate. So to have a lower unemployment rate, we have to suffer a higher inflation rate.

(d) If Ricardian equivalence holds, then tax cut is ineffective.

(e) Assume in a two-period endowment economy, the consumer saves in the first period. Now with the increase of the interest rate, the consumer may become a borrower in the first period