Consider the following statements:
1. An additional spending by the Government of X is likely to have less impact on income than an additional transfer of X to households.
2. An additional spending by the Government of X is likely to have less impact on income if it is not accompanied by an expansion in money supply.
Which of the statements given above is/are correct?
1
1 only
2
2 only
3
Both 1 and 2
4
Neither 1 nor 2