True or False questions money supply and Ramsey model economics homework help

Determine T/F and why.

1. The main reason the changes in money supply is considered as the main reason for the inflation is

based on the empirical evidence that the changes in money supply explains most of the changes in

Aggregate Demand, not because the changes in money supply has more impact on inflation than other factors.

2. In Ramsey Model(A growth model considering the utility maximization of the infinitely lived households)

when the production curve is concave function and the rate of time preference is bigger than 0,

the per capita capital at a steady-state maximizes the steady state’s consumption