1. A reduction in income will cause a reduction in the interest rate.
2. In the wage-setting relation, the nominal wage tends to decrease when the unemployment rate decreases.
3. If the output is too high, to achieve the medium-run equilibrium, the central bank will reduce the policy rate.
4. When in fiscal contraction consumption, output and the interest rate will decrease.

Tell whether it is true or false and give an analytical/ short explanation for each of them.