Given below are two statements :
Statement I : When the level of investment is itself determined within the system then the effectiveness of monetary policy is enhanced by an elastic investment and inelastic liquidity preference schedule, whereas the opposite holds for the effectiveness of fiscal policy.
Statement II : Monetary policy, by accommodating fiscal policy may forestall the crowding out effect.
In the light of the above statements, choose the correct answer from the options given below:
1
Both Statement I and Statement II are true
2
Both Statement I and Statement II are false
3
Statement I is true but Statement II is false
4
Statement I is false but Statement II is true