1. TRUE/FALSE/MAYBE and EXPLAIN: (2 MARKS). (Maximum length: half-page) "The Aggregate Expenditure (A) model is a short-run model. The Solow-Swan model is a long-run model. Yet both assume that there are

no "idle funds", i.e. any funds not consumed are saved and automatically funneled into investment. How can this be possible given that there can be output gaps in the short run?"