TRUE or FALSE

1. A decrease in transfers lowers equilibrium output or income by the marginal propensity to consume times the reduction in transfers.
2. According to the accelerator model, the demand for capital increases with the expected level of output and the tax credit on investment but declines with the real rate of interest.
3. The IS curve is negatively sloped because an increase in the interest rate reduces unintended investment spending and therefore reduces aggregate demand and consequently equilibrium income.
4. The bigger the discount rate on banks' borrowing from the Central Bank, the bigger is the money supply for a given supply of high-powered money.
5. Other things equal, if the public prefers to hold more currency compared to deposits, the bigger is money stock.
6. The higher the rate of interest, the bigger is money stock for a given supply of high-powered money.