Economics · Macroeconomic Policies
Consider the following statements regarding macroeconomic policies: Statement I: Expansionary policies are used to boost economic activity during periods of slowdown or recession. Statement II: Expansionary fiscal policy includes increasing government spending and cutting taxes. Statement III: Expansionary monetary policy aims to increase money supply by reducing interest rates. Which one of the following is correct in respect of the above statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1All three statements are correct, and both II and III explain the objectives mentioned in I.✓
- 2Both Statement II and Statement III are correct, but they do not relate to Statement I.
- 3Only Statement I and Statement II are correct.
- 4Neither Statement II nor Statement III is correct.
Correct answer
All three statements are correct, and both II and III explain the objectives mentioned in I.
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